Paper Number
ICIS2025-2503
Paper Type
Complete
Abstract
As franchise systems expand, a key question arises: does intra-brand proximity intensify competition or promote market expansion across online and offline channels? Existing studies often overlook channel-specific variations and the moderating role of inter-brand competition. This study examines how intra- and inter-brand proximity within 1.5 km affect omnichannel store performance. Using store-level sales data from a South Korean multi-brand retailer, we employ Hausman-Taylor instrumental variable models to address endogeneity. Results indicate an inverted U-shaped relationship between intra-brand proximity and offline sales. Inter-brand proximity also shows an inverted U-shape offline and mitigates intra-brand cannibalization. Online, intra-brand proximity similarly follows an inverted U-shape but exhibits a sharper decline, reflecting stronger internal competition. Inter-brand proximity has a consistently negative effect online, without significant moderation. These findings highlight the necessity of channel-specific spatial strategies when managing franchise expansion and omnichannel competition.
Recommended Citation
JIN, XUANTING; Um, Sungyong; Kim, Taekyung; and Lee, Dongwon, "Beyond Mere Distance: How Intra- and Inter-Brand Proximity Shape Omnichannel Performance" (2025). ICIS 2025 Proceedings. 11.
https://aisel.aisnet.org/icis2025/impl_adopt/impl_adopt/11
Beyond Mere Distance: How Intra- and Inter-Brand Proximity Shape Omnichannel Performance
As franchise systems expand, a key question arises: does intra-brand proximity intensify competition or promote market expansion across online and offline channels? Existing studies often overlook channel-specific variations and the moderating role of inter-brand competition. This study examines how intra- and inter-brand proximity within 1.5 km affect omnichannel store performance. Using store-level sales data from a South Korean multi-brand retailer, we employ Hausman-Taylor instrumental variable models to address endogeneity. Results indicate an inverted U-shaped relationship between intra-brand proximity and offline sales. Inter-brand proximity also shows an inverted U-shape offline and mitigates intra-brand cannibalization. Online, intra-brand proximity similarly follows an inverted U-shape but exhibits a sharper decline, reflecting stronger internal competition. Inter-brand proximity has a consistently negative effect online, without significant moderation. These findings highlight the necessity of channel-specific spatial strategies when managing franchise expansion and omnichannel competition.
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Comments
14-Implementation