Abstract:
Abstract We analyze competition between the online and the offline retail channel by using data on the German book market, which is characterized by fixed book prices. The analysis sheds light on the extent to which consumers perceive e-Commerce and traditional brick-and-mortar stores as substitutes. We find that, on average, when a bookstore closes, sales of print books decrease by around 744 units per month. This explains about 37% of the total loss in sales of print books in our sample. These findings indicate imperfect substitutability between the online and the offline retail channel. Substitutability between the channels remains imperfect when we incorporate information on e-book sales. The magnitude of the effect is genre-dependent. For instance, sales of fiction titles decrease more strongly than sales of school books. The data used in our study were provided by media control GmbH, GfK GmbH and Acxiom Deutschland GmbH. We received funding from the German Publishers and Booksellers Association (“Börsenverein des Deutschen Buchhandels e. V.”) to buy the data. Moreover, the German Publishers and Booksellers Association funded a research project at the Chair of Georg Götz from 2018 to 2020. Our study is a product of this project. The project itself was scientific in nature (i. e., no commercial research project). To conduct this project, the positions of the coauthors Jan Thomas Schäfer and Daniel Herold were funded by the German Publishers and Booksellers Association during the aforementioned period.