Channel Extension Signalling Effects - How consumer-perceived signals of effort behind an added channel affect the entire online retail brand

Abstract: Over the last decade, multichannel retail strategies, in which new channels are added to existing channel mix offering to implicitly increase consumer value and keep competitiveness on the market, has grown rapidly. Although creation of a multichannel offering seems to hold many benefits for retailers, the full effects on their customers, and by extension the brand, are largely unknown. Drawing on marketing signalling literature and by deploying a channel extension as a marketing element, this thesis investigates the signalling power a channel extension has for the retail brand with a scenario-based experiment in a Swedish online fashion retail setting. The study shows that consumer-perceived effort in a channel extension signals brand ability to serve consumer demands, which implicitly impact brand attitude and purchase intention. By demonstrating the signalling power the execution of a channel extension has for the retail brand, and replicating recent findings of marketing signalling literature, this thesis extend current understanding on how channel extension, through a consumer point of view, impact the online retail brand.