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The Substitutability between Brick-and-Mortar Stores and e-Commerce - The Case of Books

Author

Listed:
  • Georg Goetz

    (Justus Liebig University Giessen)

  • Daniel Herold

    (Justus Liebig University Giessen)

  • Phil-Adrian Klotz

    (Justus Liebig University Giessen)

  • Jan Thomas Schaefer

    (Justus Liebig University Giessen)

Abstract
We analyze the substitutability between brick-and-mortar stores and e-Commerce. Using a novel data set on the German book market we find that between 26 and 55% of the decrease in book sales from 2014-2017 can be explained by the decrease in the number of bookstores. This indicates that brick-and-mortar stores and e-Commerce are imperfect substitutes. One explanation could be that some consumers prefer to purchase books offine because of the service provision in brick-and-mortar stores (e.g., advice, atmosphere, presentation, sales-effort, etc.). We also find that the degree of substitutability differs between different types of books. When a bookshop closes the decrease in sales of fiction titles is more than 2 times larger than the decrease in sales of non-fiction titles. Our findings indicate that regulatory measures and vertical restraints that increase the number of bookstores can have a positive effect on the demand for books even in the presence of e-Commerce.

Suggested Citation

  • Georg Goetz & Daniel Herold & Phil-Adrian Klotz & Jan Thomas Schaefer, 2020. "The Substitutability between Brick-and-Mortar Stores and e-Commerce - The Case of Books," MAGKS Papers on Economics 202011, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202011
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    References listed on IDEAS

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    Cited by:

    1. Maximilian Maurice Gail & Phil-Adrian Klotz, 2021. "The Impact of the Agency Model on E-book Prices: Evidence from the UK," MAGKS Papers on Economics 202111, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    Experience goods; Retailing; e-Commerce;
    All these keywords.

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