International Journal of Innovation, Creativity and Change. www.ijicc.

net
Volume 14, Issue 10, 2020

The Role of Channel Integration in

Customer Movement from Offline
Channel to Online Channel in a
Multichannel Environment
Muhammad Rizwana, Norzieiriani Ahmadb, aPhD Scholar, School of
Business Management, University Utara Malaysia, Malaysia, bSenior
Lecturer, School of Business Management, University Utara Malaysia, Email:
a
rizwan.arshad@iub.edu.pk, bnorzie@uum.edu.my

The evolution of internet technology, rapid digitalization and

introduction of multiple channels strongly influence the managers and
researchers alike to discover and update how customers behave in
multiple channels and how companies and customers better interact in
a multichannel environment. The COVID-19 pandemic crisis around
the world significantly affect the performance of national and
international firms and the firms with vibrant capabilities of operating
in multiple channels survive during this crucial time. More important
is the question of how the multiple channels can be handled
synergistically to maximize the customer repeat purchase behavior.
The current study is an attempt to understand whether the role of
channel integration helps in customer movement from firm’s offline
channel to firm’s online channel. Data have been collected from a
sample of 358 experienced online customers from different cities of
Pakistan and analysed through smart PLS. The results of the study
confirm that the customer previous interaction with the firm offline
channel significantly affect the customer perception about firm’s
online channel. Additionally, the results of the study also confirm the
moderating role of channel integration in transfer of customer
perceptions form offline channel to online channel. Although each
channel may offer a unique value proposition, channel integration can
drive overall customer satisfaction and repeat purchase behaviour in a
relational, multichannel environment. Managerial contributions have
been provided for practitioners and firms as well.

Key words: Online shopping, Multichannel, Channel Integration, Offline channel,

Online channel, Repurchase Behaviour, Pakistan.

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Introduction

Online shopping is a process where customers purchase products and services directly from
the sellers using internet as a medium (Koivumäki, 2001). More specifically, online
shopping is a process of purchasing good and services from a firm’s online store using
internet and it involves the activities like accessing online firm’s online store, searching for
desired products, selecting them, purchasing them, payments and use of selected products
in order to satisfy personal needs and wants (Lee, Ariff, Shoki, Zakuan, & Sulaiman,
2016). Customers from different corners of the world are shopping through online stores
while sitting at their home or office because online shopping enable them to buy books,
apparels, groceries, cars, and even houses from their favorite suppliers without going
anywhere from home and at their convenient time.

145 firms from the top 250 firms having online presence worldwide experienced 21%
increase in their online sales and American retail online sales are expected to grow from
$263 billion in 2013 to $414 billion in 2018 (8.9% in 2014) (Carlson, O’Cass, & Ahrholdt,
2015). Due to this expectation of sale growth, the global online firms are making efforts to
bring fresh online customers to their online stores while retaining the old ones in driving
sale growth (Mohamed, Hussein, Hidayah Ahmad Zamzuri, & Haghshenas, 2014). Getting
new customers is relatively costly, it takes more times and more cost to acquire a new
customer compared with retaining the old ones (Weinstein, 2002). Additionally, the repeat
customer spends about 67% more than a fresh one (Mohamed et al., 2014). Therefore, the
issue of retaining old customers continuously attract scholars’ interest and considered as
the main element of developing competitive advantage (Zhang et al., 2011) and important
factor for these online firms’ success (Chiu, Chang, Cheng, & Fang, 2009). The concept of
online repurchase intention (ORPI) would be helpful for online firms in formulating the
strategies for customer retention, however, the ORPI remain underrepresented area in
online research (Mohamed et al., 2014).

A huge volume of customers has been using a wide range of channels randomly during
their daily purchases (Verhoef, Inman, & Kannan, 2015). By spending more time and
money, these multichannel customers become an attractive segment for firms than single-
channel customers. Therefore, the firms that launch a new online channel are required to
comprehend the multiple channel mechanism. They need to know how different channels
co-influence other channels and finally the impact of their interaction on customer ORPI
(Hammerschmidt, Falk, & Weijters, 2016).

Despite many benefits of multichannel retailing in e-commerce, few empirical studies

about repurchase intention in this multichannel environment are available and many studies
call for further empirical research. Few studies are available in the past literature of

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multichannel business model, combining both offline and online channels (Bapat, 2017).
More precisely, the current study proposes a model of multichannel integration to address
this important research gap for extending the customer repurchase intention and
empirically tests it in Pakistan.

Literature Review
Definition and Conceptualization of Online Repurchase Intention

As per Rajaobelina and Bergeron (2009), repurchase intention defines the perceptual
degree of beliefs of a particular consumer to buy again a given product or to buy again
from a particular firm. This phenomenon represents the biased behavior of a customer
towards any product or firm that goes beyond loyalty (Izogo, 2016). Similarly, online
repurchase intention (ORPI) symbolizes a customer’s willingness to buy or purchase
repeatedly from the similar online store based on previous personal experience (Kim,
Galliers, Shin, Ryoo, & Kim, 2012). The literature of ORPI stressed that the cost of
attaining new customers is much higher in the online environment in contrast to offline
environment but when the customers become repeat purchasers of online channel they tend
to spend more money compared to their initial spending (Reicheld & Schefter, 2000).
Hence, if these online firms want to remain competitive, they need to keep their old
customers and influence them to stay connected (Chiu et al., 2009). However, comparing
the offline channel to online channel, retaining an old customer is quite difficult and many
challenges are associated with online channel.

Expectation Confirmation Theory (ECT)

Originally Eexpectation Cconfirmation theory has been developed by Oliver (1980) and
being extensively used in various marketing domains, especially in the literature regarding
the customer behavior to identify the linkage between the customer satisfaction and after
purchase behavior (Dabholkar, Shepherd, & Thorpe, 2000). The ECT is frequently used to
determine the post purchase behavior and considered a paramount approach to study these
relationships. Specifically, in the customer related past literature, ECT has been applied to
explore the phenomenon of repurchase intention in several areas of product and services.
Accordingly, ECT describe the intention of the customer to buy again a specific item is
solely and predominantly depends upon the degree of satisfaction gained during the prior
experience with the product and services (Oliver, 1980, 1993).

Customer Satisfaction

The additional cost of acquiring new customers relative to the cost for retaining old
customers have amplified the firms and practitioners interest in developing and maintaining

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the excellent long-term relationships with the customers as a superior option to enhanced
firm’s profitability (Ennew, Binks, & Chiplin, 2015). While, customer satisfaction is an
important tool for developing successful customer relationships. Therefore, a large portion
of previous customer related literature surrounds customer satisfaction. The literature keep
trying to identify the relevant antecedents and consequences as well for customer
satisfaction that can be used to apply in current business environment (Albayrak & Caber,
2015). The customer satisfaction is considered as performing the central role in marketing
literature to study the relationship between customer pre-consumption expectations and
post-consumption behavior (Ameer, 2014). Customer satisfaction was attributed for the
primary reason for firm’s success, source of competitive advantage, performance and
profitability (Siddiqi, 2011; Yeung, Ramasamy, Chen, & Paliwoda, 2013).

Customer Trust

In social life, the people continuously interact with other people that are purely independent
and difficult to predict. The human tendency to understand others make this phenomenon
complex (Gefen, 2000). In this situation, trust is the only tool that can help the people to
interact with others and reduce social complexity (Luhmann, 1979). This is relatively more
important in the absence of rules and regulations that governed the interactions (Fukuyama,
1995). Generally, trust is a level of confidence and a person expectation about the other
behaviors normally depends upon the previous history of interactions. Although the
previous behavior of a person is not a guarantee or proxy for his/her future behavior, but
trust represent the expectation of the repetition of the behavior. Different studies
conceptualize the trust in different way like trust can be a belief, emotion, intention, feeling
or behavior (Bhattacherjee, 2002; Swan & Nolan, 1985). However, most of the studies
confirm the existence of trust depends on mutual beneficial relationship (Gundlach &
Cannon, 2010; Shim, Serido, & Tang, 2013).

Service Quality

In the marketing literature regarding the service quality, the most frequently used and
simplest description of service quality is to fulfil the customer expectation (Parasuraman et
al., 1991). However, the customer expectations are regarded as the specific beliefs
regarding the delivery of services that function to set reference points or the criteria that
will be used to evaluate the performance (Zeithaml, Berry, & Parasuraman, 1996). The
customer perceptions can be regarded as their subjective evaluation of their service
experience during the interaction with the firm. The judgement of service quality could be
affected due to expectation and perception of service. If the customer received the services
as he/she expected, the judgement of service quality would be satisfactory and if the
judgement of the customer regarding the services received exceed their initial expectation,

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the customer would be delighted and regard the service quality as outstanding. However, if
the performance of the firm are less than the customer initial perception, there will be an
impression of dissatisfaction regarding the service quality of the firm (Parasuraman,
Zeithaml, & Berry, 1985). Therefore, improving the judgements of customers regarding the
service quality require the firm to constantly fulfil the needs and desires of the customer.
Creating and managing service quality judgements provide ultimate benefits for the firm
and also help them to achieve competitive advantage (Hussain, Al Nasser, & Hussain,
2015).

Theoretical Framework and Research Hypotheses

Offline Service Quality (OFSQ) and Online Service Quality (ONSQ)

The customer perception of service quality works as an appraisal that leads towards
satisfaction and future behavior whether in online environment or offline environment.
However, the possible interaction between different channels and the reciprocal effects are
rarely investigated (White et al., 2013). When the customers and firms have asymmetric
information, the customers can experience the service quality after their consumption
(Wang et al., 2016). In multichannel context, the previous customer experience in offline
channel serve as a guide or expectation for the online channel experience (Jiang, Xu, &
Bao, 2016). The perception of parent brand can be transferred to newly developed product,
the perception of service quality can be transferred from one channel to another channel.
The results of previous studies confirm the impact of OFSQ on ONSQ (Fan & Yang, 2015;
S. Yang et al., 2017; Yang et al., 2013). Therefore, the current study hypothesizes that:

H1: There is a positive relationship between Offline Service Quality and Online Service
Quality.
Offline Satisfaction (OFS) and Online Satisfaction (ONS)

Previous literature of online customer behavior mainly focuses on particular online

elements and ignored the possible effect of customer offline experience to better
understand the performance of multichannel firms. However, the customer appraises the
multiple channels in comparison to one another and the possible interaction of different
channel’s satisfaction influence the behavioral intentions (Van Birgelen, De Jong, & De
Ruyter, 2006). The overall satisfaction with a multichannel firm is a cumulative experience
of the customer in both offline and online channels (Montoya-Weiss et al., 2003b).
Therefore, the current satisfaction of a customer from one channel act as a proxy for
anticipated satisfaction (Jin, Park, & Kim, 2010). A study by Chu et al. (2016) suggested
that the ONS is influenced by specific online and offline elements like ONS, and these
elements enhance the customers ORPI as well. Therefore, the current study hypothesizes
that:

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H2: There is a positive relationship between Offline Satisfaction and Online Satisfaction.

Offline Trust (OFT) and Online Trust (ONT)

Trust transference is regarded as a cognitive process that includes the transfer of trust form
known context (offline channel) to unknown context (online channel) (Lim et al., 2006).
Therefore, a customer can trust on online channel if he/she has trust on offline channel
given that the both channels are associated with the same firm. These customers believe
that a trusted firm which successfully providing product and services in offline channel
tends to have the expertise to perform well in the online channel (Chaouali, Ben Yahia, &
Souiden, 2016). Many previous studies confirm the transferability of trust from one
channel (offline) to another channel (online), in online business (Luo et al., 2017), in
retailing industry (Badrinarayanan, Becerra, Kim, & Madhavaram, 2012), in online
newspaper industry (Farooghi, 2015) and in banking industry (Chaouali et al., 2016). Based
on these empirical studies and arguments, the current study hypothesizes that:

H3: There is a positive relationship between Offline Trust and Online Trust.

Online Satisfaction and Online Repurchase Intention

The connection between satisfaction and repurchase has been originated in the offline
environment and studied in offline channel. Consequently, the approach is adopted by
many online studies and they start incorporating the satisfaction-repurchase link in the
online channel studies. The link between satisfaction and repurchase is empirically tested
and confirmed in different studies of offline channel (Bindroo, He, & Echambadi, 2016;
Chang, 2015; Liang & Lin, 2016; Nagengast, Evanschitzky, Blut, & Rudolph, 2014) and
online channel (Chou & Hsu, 2016; Gao et al., 2015; Liang et al., 2018). Many studies
further explore the insights between satisfaction-repurchase link. The results indicate that
the both components of satisfaction are strong predictors of ORPI (S.-W. Chou & Hsu,
2016). Another study split the satisfaction construct into two components i.e. transaction
related satisfaction and experience related satisfaction, however, the both components are
associated with ORPI (Liang et al., 2018).

Based on above discussion and empirical findings of the previous studies, the current study
hypothesizes that ONS is positively associated with ORPI. Therefore, the following
hypothesis is put forward:

H4: There is a positive relationship between Online Satisfaction and Online Repurchase
Intention.

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Channel Integration as a Moderator

In the previous literature, several studies try to explore the relationship between different
offline determinants and online determinants like satisfaction, service quality, trust and
image. These studies try to investigate the significant relationship between the offline and
online determinants to confirm that the positive beliefs of one environment (offline
channel) can be transferred to another environment (online channel). However, the results
of these studies are contradictory and difficult to generalize. Some authors attribute these
insignificant results to lack of channel integration (Herhausen, Binder, Schoegel, &
Herrmann, 2015; Jin et al., 2010). Many studies suggest channel integration as a solution
for integrating these channels (Picot-Coupey, Huré, & Piveteau, 2016). The integration of
multiple channels (e.g. integration of information, services, payment options) as well as the
possibility to be able to switch between multiple channels (e.g. informing and purchasing
in different channels) are underlying dimensions of perceived synergies in the multichannel
e-commerce context that can be achieved through channel integration.

Based on the literature and the arguments developed in the previous section and
recommendations of (Herhausen et al., 2015; Jin et al., 2010), the current study propose
channel integration as a moderator between offline and online determinants. Thus, the
current study hypothesizes that:
H5: Channel integration moderate the relationship between Offline Service Quality and
Online Service Quality.
H6: Channel integration moderate the relationship between Offline Satisfaction and Online
Satisfaction.
H7: Channel integration moderate the relationship between Offline Trust and Online Trust.

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Figure 1. Theoretical Framework

Methodology

A cross-sectional method is used to collect data from the targeted population regarding the
various constructs of the current study. For survey purpose, a structured questionnaire was
used for the current study. The target population of the current study is restricted to online
shoppers who purchase at least once from the internet. A sample of 384 respondents is
supposed to be appropriate for testing the study hypotheses at 95% confidence level and
5% margin of error (Sekaran, 2003). Hence, a minimum number of 384 participants of
online shoppers are required to participate in the current study. The population of the
current study was quite large, and the sampling frame was not available. Due to these
constraints, the current study utilizes mall intercept sampling.

Research Instrument

A structured questionnaire was used based on previous established scales to measure the
important constructs of the current study. These measures are frequently used in several
previous studies. Online satisfaction (ONS) was measured by using 5 items adapted from
Chen and Cheng (2013). Online Trust (ONT) was measured by using the 7 items scale
adapted from Bhattacherjee (2002). Online service quality (ONSQ) scale has been taken
from the study of Wang et al. (2010). The scale for OFT was from the study of Xie and
Peng (2009). The scale for Offline satisfaction (OFS) was adapted from Chen and Cheng

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(2013). Online repurchase intention (ONRI) was measure by 3 items scale adapted from the
study of Khalifa and Liu (2007). The scale for Channel Integration was adapted from the
study of Li et al. (2018).

Analysis and Results

Assessment of Measurement Model

The individual items reliability focus on the outer loading of the measure of each construct
(Hair et al., 2012). According to Hair et al. (2014), the rule of thumb is to retain
measurement items with loadings between 0.40 and 0.70. However, the best practice is to
retain item which loadings do not fall below 0.70 (Hair et al., 2014; Hair et al., 2007;
Henseler et al., 2009).

As shown in Table 4.8 below, all of the construct items displayed the highest values on their
respective constructs. Likewise, the items involve significantly and acceptably high loadings,
such as Offline Satisfaction, Offline Service Quality, Offline Trust, Online Satisfaction,
Online Service Quality, Online Trust, Channel Integration and Online Repurchase Intention.
However, one item from Offline Trust (OFT4), one item from Offline Service Quality
(OFSQ5) and one item from Channel Integration (ChInt8) fell below the threshold of 0.70
(Hair et al., 2014; Hair et al., 2007; Henseler et al., 2009). These three items were deleted
while retaining 52 items. Preliminary results confirmed that the items had loading between
between 0.703 and 0.904. The acceptable value for composite reliability defined in the
literature (Hair et al., 2017) should not be lower than the threshold value of 0.7. The table 4.8
shows that all the variables were highly reliable, which shows that the measurement model
was reliable for further analyses. The Cronbach’s alpha (α) was also calculated to validate the
internal consistency of the constructs. As per the rule of thumb given by Hair et al. (2017),
the value of greater than 0.9, 0.8 and 0.7 were classified as excellent, good and acceptable
respectively. Table 1 below shows the Cronbach’s alpha, and composite reliability scores of
all variables.

Table 1: Cronbach’s Alpha, Composite Reliability, and AVE of Latent Constructs

Constructs Cronbach’s Alpha CR AVE
Offline Satisfaction 0.835 0.883 0.655
Offline Trust 0.917 0.928 0.617
Offline Service Quality 0.882 0.918 0.737
Online Satisfaction 0.879 0.926 0.806
Online Trust 0.894 0.914 0.542
Online Service Quality 0.894 0.922 0.701
Channel Integration 0.924 0.937 0.625
Online Repurchase Intention 0.831 0.898 0.747
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Assessment of Structural Model

Once the goodness of the path model had been established, the next step was to examine the
hypotheses. By running PLS-SEM (PLS algorithm and bootstrapping), structural model was
assessed (Chin, 2010).

Hypotheses Testing and Path Coefficients for Direct Hypotheses

To generate the path coefficients, the PLS algorithm was run initially. A bootstrapping
procedure with a sample of 500 cases and a bootstrap sample of 358 cases were run to
evaluate the significance of the path coefficients (Hair et al., 2014; Hair et al., 2011, 2012;
Henseler et al., 2009). It is important to note that the whole model, including all the variable
of interest, was run all at once to establish the results of the direct structural paths in
alignment with the objectives of this study.

Hypothesis 1: Offline satisfaction is positively related to online satisfaction.

The result from the output of the PLS algorithm and bootstrapping showed a positive and
significant association between offline satisfaction and online satisfaction (β = 0.167, t =
2.117). Therefore, Hypothesis 1 was supported.

Hypothesis 2: Offline service quality is positively related to online service quality.

A significant and positive relationship between offline service quality and online service
quality was found (β = 0.162, t = 3.134). Hence, Hypothesis 2 was supported.
Hypothesis 3: Offline trust is positively related to online trust.

A positive and significant association between offline trust and online trust (β = 0.322, t =
4.237) was found. Hence, hypothesis 3 was supported.

Hypothesis 4: Online satisfaction is positively related to online repurchase intention.

A positive and significant association between online satisfaction and online repurchase
intention (β = 0.300, t = 5.973) was found. Hence, hypothesis 4 was supported.

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Table 2: Results of Hypothesis Testing: Direct Relationships

Hyp Structural Path Beta (β) S.E t-value P-value Decision
H1 OFSAT -> ONSAT 0.167 0.079 2.117 0.035 Supported
H2 OFSQ -> ONSQ 0.162 0.052 3.134 0.002 Supported
H3 OFTR -> ONTR 0.322 0.076 4.237 0.000 Supported
H4 ONSAT -> ORPI 0.300 0.050 5.973 0.000 Supported

Testing Moderation Effect

In this study, the researcher applied the moderating variable as an additional construct using
the cross product of the indicator of the predictor variable and the moderator (Chin et al.,
2003). This method of testing is called a product indicator approach. Subsequently, an
interaction model was tested by creating an interaction term between offline and online
constructs. This model included the moderating effect of channel integration on the
relationship between various offline and online constructs. This product indicator approach
involved determining the path coefficients and t-values. Based on Hair et al. (2013) analysis
of the moderation effect, the result suggests that the relationship between offline and online
constructs would be strengthened by channel integration.

Table 3: Results of the Moderating Effect Model

Hyp Structural Path Beta (β) S.E t-value P-value Decision
H5 ChINT*OFSAT -> 0.203 0.042 4.810 0.000 Supported
ONSAT
H6 ChINT*OFSQ-> ONSQ 0.199 0.059 3.378 0.001 Supported
H7 ChINT*OFTR -> ONTR 0.137 0.055 2.483 0.013 Supported

Discussion

The result of this study revealed the significant relationship between offline service quality
and online service quality. For this study, offline service quality appears to be significant to
develop a favorable perception of online service quality, which indicates that the
customer’s favorable perception of firm’s offline channel service quality significantly
affects their perception of firm’s online channel service quality (Yang et al., 2011). In a
multichannel context, customers are likely to experience with multiple channels (Montoya-
Weiss et al., 2003) and they may rotate channel use among a set of available channels, so
that as the number of channel options grows, channel switching will occur to the extent that
each channel creates specific customer value and contributes to customer favorable
purchasing decisions. Therefore, in a multichannel context, we contend that online channel
service quality is assessed relative to a benchmark of traditional offline channel because
customers of technological products such as the online channel can poorly formed service
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expectations (Zeithaml, Parasuraman, & Malhotra, 2002). Therefore, customers form

service quality perceptions on the basis of their comparison of services offered by the
online channel and the offline channel (Herhausen et al., 2015). Following this view, the
alternative channel may benefit from investments in a different channel. Thus, the higher
service quality of the offline channel may increase the positive assessment of the online
channel service quality (Herhausen et al., 2015).

For this study, offline satisfaction appears to be significant to develop a favorable

perception of online satisfaction, which indicates that the customer’s favorable perception
of firm’s offline channel satisfaction significantly affects their perception of firm’s online
channel satisfaction. In a multichannel environment, the firms which operate in multiple
channels are faced with intense pressure to ensure a superior customer satisfaction with the
set of channels they offered rather than focusing on a single channel (Hammerschmidt et
al., 2016). Channels are regarded as complementary; that is, satisfaction with one channel
enhances a customer’s intention to use another channel. The complementary cross-channel
effects suggest that customer use of new channels can be influenced by the level of
satisfaction provided by the benchmark alternative channel. The current study postulated
that multichannel customers satisfied with offline channel are more likely to be satisfied
with online channel based on the subjective likelihood of success (satisfaction) issue of
attribution principle and this reasoning states that if an outcome (whether positive or
negative) is ascribed to a stable cause, then the same outcome will be anticipated in the
future (Weiner, 2000). Customer offline satisfaction is developed from stable causes such
as product quality, channel quality and service, etc.; accordingly, the same outcome (i.e.
satisfaction) is anticipated from visiting the online channel (Jin et al., 2010). Supporting
this notion, Söderlund (2003) also empirically found that current satisfaction is a predictor
of anticipated satisfaction. Similarly, the level of satisfaction gain from the past experience
with the firm’s offline channel can influence the expected satisfaction with firm’s online
channel (Jin et al., 2010).

Based on empirical results of the current study, offline trust appears to be significant to
develop a favorable perception of online trust, which indicates that the customer’s
favorable perception of firm’s offline channel trust significantly affects their perception of
firm’s online channel trust. Therefore, the customer trust accumulated over time in one
channel can be transferred to another channel. The Firms can leverage the existing
customers’ trust in offline channel to produce similar customer trust in their online-based
counterpart (Bock et al., 2012; Kuan & Bock, 2007; Yang, 2016). Many offline firms have
migrated online during the last few years, hence an important issue is whether customers
transfer their trust in a firm across channels to form more favorable perceptions about its
online channel. Multiple studies suggest that customer trust in an offline channel positively

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affects perceptions of the firm’s online business (Hahn & Kim, 2009; Lin et al., 2011;
Yang, 2016).

These results are also confirmed by some recent studies describing a strong association
between online satisfaction and online repurchase intention (L. J. Liang et al., 2018; Liao,
Lin, Luo, & Chea, 2017). Customers are more likely to intent to repurchase from the online
channel when an online channel is able to keep customers more satisfied (Bulut, 2015).
Regarding the online environment, customer satisfaction is one of essential key, attributing
to the increasing customer retention rate, profitability, and long-term growth of online
channels (Chen et al., 2012). Studies have demonstrated the importance of online customer
satisfaction on repeat purchase behavior; more specifically, satisfied customers are more
likely to repurchase more in the future than dissatisfied customers (Lin & Lekhawipat,
2014).

In present study context, channel integration is a system attribute that affects user
evaluations of the online channel and subsequent channel adoption decisions. channel
integration can present both opportunities and threats to firms, namely, channel integration
can be performance enhancing and performance destroying (Herhausen et al., 2015). In the
light of the potential costs associated with channel integration, future consequences of
channel integration are highly relevant in practical and theoretical terms. The channel
integration can optimized the customer experience and channel performance across
channels (Verhoef et al., 2015). To generate complementary effects, different channels can
be integrated to satisfy customer needs so that they may in turn purchase from both online
and offline channels of the same firm (Avery, Steenburgh, Deighton, & Caravella, 2012; J.
Kim & Park, 2005; Kwon & Lennon, 2009; Wallace et al., 2004).

The current study found that perceived channel integration had strong positive effects on
the customers’ appraisals in both offline and online channels. This result provides evidence
that the effectiveness of channel integration is important in customer cross channel
movement. This finding suggests that retailers can improve customers’ appraisal of new
online channel by effectively integrating their multiple marketing channels. Indeed, if
multichannel firm can maintain a well-integrated multi-channel system, such as providing
consistent interface, inventory information, price information, complain resolution and
customer service, their customers are more likely to generate favorable quality evaluations
on their individual marketing channels. The underlying cause may be that customers can
increase their services utility by utilizing different retail channels suited to their different
needs according to their convenience (Yang et al., 2017). It is also essential to have an
integrated view of customers across all channels in order to build a comprehensive
complaint history of each customer and thus deal with complaints properly (Frasquet, Ieva,
& Ziliani, 2019). The customers who shopped with multichannel firms provided offline

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store information on their online channel achieved better perceived service quality and less
risk from customers about their online channel (M. Zhang, Ren, Wang, & He, 2018).

To the best of our knowledge, our research is the first to examine whether and how channel
integration leads to a competitive advantage for multichannel firms through facilitation of
customer movement from one channel to another. The results of our study provide
evidence that customers value firm’s integrated channels and that channel integration leads
to more favourable behavior toward a multichannel firm and its multiple channels. These
findings underline that channel integration is a potential source of competitive advantage
for multi-channel firms. Hence, channel integration mainly attracts additional customers to
the firm’s online store who would otherwise purchase in non-integrated online stores from
competing firms.

Limitations and Recommendations for Future Research

The study has several limitations that warrants future investigations to develop further
insights for multichannel environment. First, the research model is validated based on the
data collected from customers of Pakistan-based multichannel fashion industry firms, thus
limiting generalizability of the findings. Future studies could overcome this limitation by
exploring retail banking, electronics firms, retail department stores, tourism services and
sports firms. Second, the current study examines the cross-channel movement of customers
from offline to online channel, however, the customer can select multiple other channel for
their purchase decisions. In future, the study model can be tested to understand the customer
cross channel movement in mobile and social media channel as well. In addition, the study
checks the customer movement from offline to online, however, the reverse can be possible,
and that needs to investigate in the future studies. Third, the current study is limited to three
channel related variables; service quality, satisfaction and trust. Inclusion of other variables in
the model can optimize the understanding of customer channel related behaviour. For
example, channel enjoyment, channel related perceived risk and channel loyalty.

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