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

• Brand Tier Moderation: The effectiveness of multichannel customer behavior varies by brand tier, with positive effects for middle-tier brands but negative effects for high-tier brands. • Nonlinear Effects: Customer multichannel behavior follows an inverted U-shaped relationship with revenue, where moderate levels enhance revenue, but excessive usage diminishes it. • Multichannel Share Index (MCSI): Introduces a novel continuous measure capturing multichannel intensity at the individual level, providing deeper insights into customer behavior. • Hidden Customer Segments: Latent class analysis reveals three distinct customer profiles, demonstrating that multichannel behavior can be a revenue booster, a neutral factor, or even a liability depending on customer characteristics. • Strategic Multichannel Investment: Encouraging multichannel usage indiscriminately can backfire; firms should tailor strategies based on brand positioning. 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.