Should customers of all brands be multichannel? Investigating the moderating role of brand tier

The rapid expansion of sales channels enables firms to increase reach and enhance customer convenience but also adds complexity to multichannel management. While prior studies often assume that multichannel customers are more profitable, we find that this is not always the case. We show that greater multichannel use is, on average, associated with lower customer revenue. However, the relationship is nonlinear. Specifically, we find an inverted U-shaped effect, where moderate levels of multichannel usage generate the highest revenues, while both low and high levels can reduce performance. Furthermore, this effect varies by brand tier: only middle-tier brands benefit from increased multichannel behavior, while low- and high-tier brands experience flat or even negative revenue effects. These results provide novel insights into the nuanced effects of customer multichannel behavior across brand tiers, enabling firms to design more targeted and effective multichannel strategies, optimize revenue growth, and mitigate the complexities associated with managing diverse sales channels.