Market share, profit margin, and marketing efficiency of early movers, bricks and clicks, and specialists in e-commerce

We examine three strategic issues that have been frequently discussed and debated in e-tailing: early mover advantages, bricks and clicks combinations as compared with pure-plays, and generalizing versus specializing. We develop hypotheses and test them utilizing annual and quarterly financial data from 42 public online retailers. We use a multilevel repeated-measures model to analyze our data because of its flexibility and ability to handle unbalanced repeated measures. The results indicate that early movers in e-commerce do not have a significant advantage in market share, profit margin, or marketing efficiency compared with later entrants. The bricks and clicks combinations in our sample possess higher market share and higher marketing efficiency than do pure-plays. Last, while specialists have lower market share and lower marketing efficiency, they nevertheless can be successful because they command higher profit margins than do generalists. The managerial implications of our findings are discussed.