Essays on technology enabled multi-channel operations

This dissertation examines the value of IT enabled channels in two multichannel operations: (1) customer support via a multichannel call center, and (2) multichannel movie distribution.;In chapter 2, I examine the value of web portal in a multichannel call center. In the empirical setting, a large health insurance firm offers two competing customer support channels at its call center: standard telephony and a web based "self-service" portal. Due to lower customer interaction cost, web portal is expected to save call center costs. I question this simplistic cost saving rationale of the web portal. On the one hand, the economic theory of vertical differentiation predicts at least a weak substitution of high cost-high quality telephony with the low cost-low quality web channel. On the other hand, if organization of information at the web portal is such that it raises customers' uncertainties, human decision making theories predict customers would use the telephony to mitigate this uncertainty. Therefore, the net impact of web portal usage on telephone calls is an empirical question. I design a quasi-natural experiment at the firm's call center and estimate a 14% increase in telephone calls due web portal usage. This increase in calls is attributed to (I) higher web portal usage due to its low access cost, and (2) unstructured information at the web portal. I find that if the information is unambiguous and easily retrievable on the web, calls decline by 29 percent. Contrary to prevalent beliefs, this research highlights that the self-service portals can lead to more calls and thus higher costs at the call center.;In chapter 3, I examine how introduction of movies on pay-TV channels affects its sales distribution. Several recent papers have argued that concentrated sales patterns for movies and music can be explained, in part, by a natural concentration in quality and increasing returns from social effects. In this paper, I empirically analyze an additional explanation for the observed concentrated sales patterns: asymmetrically informed consumers. I do this by using the pay-cable broadcast window for movies as an exogenous shock to the availability of information about movies --- essentially using the pay cable window as promotion for a wide spectrum of popular and less popular movies. I then analyze how this promotional shock changes the DVD sales distribution of movies. My data show that broadcasting movies on pay-cable channels results in a significant shift in the DVD sales distribution of movies toward the tail. This indicates an information spillover effect from the movie broadcast that dominates any "quality" or "social" effects. In short, the dominant effect of the movie broadcast on pay cable channels is to help uninformed consumer discover movies they otherwise would not have been aware of. I extend this analysis using a learning based model of DVD demand to more precisely quantify the proportion of uninformed customers, and thus lost DVD sales, due to incomplete information. This study contributes to the growing literature on impact of information provision on market outcomes and on the dynamics of long tail markets.;In chapter 1, I examine how product customization via co-creation affects customer support costs. In my setting a health insurance firm sells a variety of complex health insurance plans and then incurs substantial costs in serving customers through its call center and adjudicating the claims using its information systems. The firm sells either standard plans or in some cases allows customer groups to customize their plans by modifying certain aspects in collaboration with the firm. This process. akin to product co-creation, should increase customers' familiarity with their coverage and improve the fit with their medical needs. Consequently customization should reduce customers' incentives to contact the firm's call center for clarifications regarding their product coverage. I design a quasi-natural experiment in my field setting to estimate that customers with the customized plans call 21 percent less frequently than the customers with the standard plans. However, I find no difference in the claims adjudication cost between the two. Overall, the results suggest the customized products may be operationally cheaper to serve than the standard products. Customization is expected to increase customer satisfaction at the expense of higher operational cost. But this research highlights the additional benefit of such customization in lowering the customer support costs --- a possible win-win situation for both the customer and the firm.