Perceived Cannibalization Related to Retail Cross Channelization
Brandon Toliver, Student, EMSE 6573 Spring 2016

Abstract: The expansion of many businesses in the online environment has been delayed as a result of an assumed negative impact on traditional sales. This presumed cross channel cannibalization should be based on a more empirical analysis that promotes informed decisions. An examination of related existing literature and research will be utilized to present a solution to the following problem: anticipated assumptions, concerns and fears are impacting organizations utilization of the Internet for fear of cross channel cannibalization. The proposed solution presented combines several established quantifiable equations and methods, producing a standardized method of analysis regarding the impact of online sales. This brief paper contends that online sales pose no immediate cannibalization of tradition sales, making these concerns relatively baseless.
Problem Overview
The phenomenon of concurrent channels being provided by the same company is fairly new, but the emergence of the Internet as an enduring market necessitates the adaption of online retail in order to remain competitive [1][3]. Late entrants into this market are apprehensive about the Internet’s bipolar nature, since it has already demonstrated its ability to catalyze both opportunities and threats [5]. The dot.com bust of the 1990s increased many retailers’ hesitance in expanding their operations to utilize the Internet. Their fears appear to be strongly routed by the notion that their physical store sales and profits would be cannibalized by an online retail offering [1]. Falk et al [3] contend that “entrenched channels [view] the Internet channel as unwelcome competition and reduced their support for the firm’s [online] products, resulting in more brand switching toward the firm’s