Commercializing the Package Flow: Cross-sampling Physical Products Through E-commerce Warehouses

Office of Alumni and External Relations    2020-10-14

Commercializing the Package Flow: Cross-sampling Physical Products Through E-commerce Warehouses

Guest: Han Rongqing, Assistant Professor, University of Illinois, Urbana Champaign

Host: Li Chengzhang, Assistant Professor, Antai

Time: Wednesday, Oct 28th, 2020, 14:00-15:30

Venue: A303, Antai Building


Many e-commerce platforms have established their warehouses to facilitate the storage and delivery of packages. This paper proposes a novel business model---cross-sampling through e-commerce warehouses---that e-commerce platforms with direct control over physical packages can adopt. Cross-sampling allows physical free samples provided by one brand (sampling brand) to be distributed with the packages of another unrelated brand. We demonstrate how the cross-sampling model can integrate offline control and online information to commercialize the package flow. In close collaboration with Alibaba, we implemented cross-sampling through a large-scale field experiment, in which more than 55,000 free samples were distributed, to empirically examine its effectiveness in driving online sales of the sampling brand. We show that cross-sampling offers three distinct advantages. First, it can be implemented at a large scale with negligible cost by leveraging the existing package flow. Second, it is highly effective in increasing brand impressions and online sales of the sampling brand and acquiring new customers. Third, it utilizes both user information (online) and item information (of the package) to personalize cross-sampling. We further adopt an analytical framework to monetize this information advantage of cross-sampling and quantify the value of information. Overall, cross-sampling is proven effective, and the analytical framework can be applied to other opportunities, including cross-selling and bundling across brands and categories. In this way, we demonstrate the potential of a new business model that leverages the offline logistics infrastructure as a profit center. 


Brian Rongqing Han is an Assistant Professor in IOSA (Information Systems/ Operations/ Supply Chain/ Analytics) area at Gies College of Business, University of Illinois, Urbana Champaign. His research focuses on designing large-scale field experiments and developing data-driven optimization tools to explore innovative business models and link data to decision-making. His recent work investigates how e-commerce platforms can leverage the logistics infrastructure as an offline platform for commercial activities such as promotion and advertisement.

Brian Rongqing Han obtained his Ph.D. in Data Sciences and Operations from Marshall School of Business, University of Southern California, and a B.A. in Economics from Shanghai University of Finance and Economics. His work has been recognized by several best paper awards, such as the winner of the best student paper award at the Workshop on Information Systems and Economics (WISE) and finalist of INFORMS Pierskalla best paper award. In Fall 2017, he also won first place in USC Marshall Ph.D. Teaching Award.

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