Customers often evaluate products at brick-and-mortar stores to identify their “best-fit” product but buy it for a lower price at a competing online retailer. This free-riding behavior by customers ...is referred to as “showrooming,” and we show that this is detrimental to the profits of the brick-and-mortar stores. We first analyze price matching as a short-term strategy to counter showrooming. Price matching allows customers to purchase a product from the store for less than the store’s posted price, so one would expect the price matching strategy to be less effective as the fraction of customers who seek the matching increases. However, our results show that with an increase in the fraction of customers who seek price matching, the store’s profits initially decrease and then increase. While price matching could be used even when customers do not exhibit showrooming behavior, we find that it is more effective when customers do showrooming. We then study exclusivity of product assortments as a long-term strategy to counter showrooming. This strategy can be implemented in two different ways: (1) by arranging for exclusivity of known brands (e.g., Macy’s has such an arrangement with Tommy Hilfiger) or (2) through the creation of store brands at the brick-and-mortar store (T. J. Maxx sells a large number of store brands). Our analysis suggests that implementing exclusivity through store brands is better than exclusivity through known brands when the product category has few digital attributes. However, when customers do not showroom, the known-brand strategy dominates the store-brand strategy.
The online appendix is available at
https://doi.org/10.1287/mnsc.2017.2764
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This paper was accepted by Chris Forman, information systems.
In this study, we present the results of the M5 “Accuracy” competition, which was the first of two parallel challenges in the latest M competition with the aim of advancing the theory and practice of ...forecasting. The main objective in the M5 “Accuracy” competition was to accurately predict 42,840 time series representing the hierarchical unit sales for the largest retail company in the world by revenue, Walmart. The competition required the submission of 30,490 point forecasts for the lowest cross-sectional aggregation level of the data, which could then be summed up accordingly to estimate forecasts for the remaining upward levels. We provide details of the implementation of the M5 “Accuracy” challenge, as well as the results and best performing methods, and summarize the major findings and conclusions. Finally, we discuss the implications of these findings and suggest directions for future research.
The density, size, and location of stores in a retailer's network influences both the retailer's and the consumers' costs. With stores few and far between, consumers must travel a long distance to ...shop, whereas shopping trips are shorter with a dense network of stores. The layout of the retail supply chain is of interest to retailers who have emission reduction targets and urban planners concerned with sprawl. Are small local shops preferred over large, "big-box" retailers? A model of the retail supply chain is presented that includes operating costs (such as fuel and rent for floor space) as well as a cost for environmental externalities associated with carbon emissions. A focus on exclusively minimizing operating costs may substantially increase emissions (by 67% in one scenario) relative to the minimum level of emissions. A price on carbon is an ineffective mechanism for reducing emissions. The most attractive option is to improve consumer fuel efficiency-doubling the fuel efficiency of cars reduces long-run emissions by about one-third, whereas an improvement in truck fuel efficiency has a marginal impact on total emissions.
This paper was accepted by Yossi Aviv, operations management.
Relative cross-border retail prices, in a common currency, comove closely with the nominal exchange rate. Using product-level prices and wholesale costs from a grocery chain operating in the United ...States and Canada, we decompose this variation into relative costs and markup components. The high correlation of nominal and real exchange rates is driven mainly by changes in relative costs. National borders segment markets. Retail prices respond to changes in costs in neighboring stores within the same country but not across the border. Prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries.
Despite the promise of augmented reality (AR) and virtual reality (VR) to help experiential retailers align online and offline experiences, guidance on choosing or combining these technologies is ...lacking. In three experiments, we address this research gap by investigating the individual and combined impact of AR and VR on key marketing objectives. First, we establish that AR is more effective in stimulating purchase intentions than VR, due to its ability to support customers in fluent product‐focused mental imagery. Second, we demonstrate that VR is better suited for improving brand attitudes than AR, as it helps customers to form fluent context‐focused mental imagery. Third, we show that AR and VR, in combination, can improve both purchase intentions and brand attitudes, but only when the order of deployment is sequenced as AR then VR. This is due to greater alignment with the customer's online‐to‐offline journey in experiential retail. When deployed the other way around, we observe a detrimental impact on purchase intentions and a potential harmful impact on brand attitudes. Our research offers a nuanced theoretical perspective of AR and VR in marketing and provides experiential retailers with evidence‐based guidelines for leveraging AR and VR within their online retailing strategy.
While the Internet has provided a new means for retailers to reach consumers, it has fundamentally changed the dynamic of competition in the retail service supply chain. The mix of offline and online ...channels adds a new dimension of competition, and one central issue of this competition is the pricing strategy between the two channels. How to set prices for both online and offline channels? What is the impact of the supply chain power structure on pricing decisions and the performance? This research aims to address these questions by focusing on a retail service supply chain with an online-to-offline (O2O) mixed dual-channel. From the Supplier-Stackelberg, Retailer-Stackelberg, and Nash game theoretical perspectives, we obtain the optimal prices and maximum profits for both the retailer and supplier under different power structures. The analysis result provides important managerial implications, which will be beneficial to retailers to develop proper pricing strategies.
"I got my first job working in a toy store when I was 41 years old." So begins sociologist Christine Williams's description of her stint as a low-wage worker at two national toy store chains: one ...upscale shop and one big box outlet. In this provocative, perceptive, and lively book, studded with rich observations from the shop floor, Williams chronicles her experiences as a cashier, salesperson, and stocker and provides broad-ranging, often startling, insights into the social impact of shopping for toys. Taking a new look at what selling and buying for kids are all about, she illuminates the politics of how we shop, exposes the realities of low-wage retail work, and discovers how class, race, and gender manifest and reproduce themselves in our shopping-mall culture. Despite their differences, Williams finds that both toy stores perpetuate social inequality in a variety of ways. She observes that workers are often assigned to different tasks and functions on the basis of gender and race; that racial dynamics between black staff and white customers can play out in complex and intense ways; that unions can't protect workers from harassment from supervisors or demeaning customers even in the upscale toy store. And she discovers how lessons that adults teach to children about shopping can legitimize economic and social hierarchies. In the end, however,Inside Toylandis not an anticonsumer diatribe. Williams discusses specific changes in labor law and in the organization of the retail industry that can better promote social justice.
As the use of analytics becomes increasingly important in today's business landscape, The Marketing Analytics Practitioner's Guide (MAPG) provides a thorough understanding of marketing management ...concepts and their practical applications, making it a valuable resource for professionals and students alike.The four-volume compendium of MAPG provides an in-depth look at marketing management concepts and their practical applications, equipping readers with the knowledge and skills needed to effectively inform daily marketing decisions and strategy development and implementation. It seamlessly blends the art and science of marketing, reflecting the discipline's evolution in the era of data analytics. Whether you're a seasoned marketer or new to the field, the MAPG is an essential guide for mastering the use of analytics in modern marketing practices.Volume III is entirely dedicated to digital marketing. The first chapter, New Media, covers the impact of new media on the social, political and marketing landscape. It outlines the new rules and perspectives, leaving readers with a clear understanding of how they must adapt to succeed in the digital age.The Digital Marketing chapter covers a wide range of topics related to digital tools, techniques, processes, as well as the opportunities and challenges of digital marketing. A set of chapters on social media highlight best practices to adopt on each of the networks - Facebook, Twitter, Instagram, YouTube and LinkedIn.Search Engine Optimization (SEO) covers on-page and off-page optimization to increase inbound traffic and channel it through the digital marketing funnel. Web Analytics covers the processes that constitute a web analytics system and deals with the use of web analytics platforms such as Google Analytics to assess the effectiveness of digital marketing in attracting and converting prospects.Search Advertising covers advertising on search engines to draw prospects and lead them through the digital marketing funnel. It covers topics such as the Google auction, keyword strategies, and practices to improve the effectiveness of search advertising.The final chapter, Digital Execution, serves as a comprehensive guide to developing and executing digital marketing plans.
As the use of analytics becomes increasingly important in today's business landscape, The Marketing Analytics Practitioner's Guide (MAPG) provides a thorough understanding of marketing management ...concepts and their practical applications, making it a valuable resource for professionals and students alike.The four-volume compendium of MAPG provides an in-depth look at marketing management concepts and their practical applications, equipping readers with the knowledge and skills needed to effectively inform daily marketing decisions and strategy development and implementation. It seamlessly blends the art and science of marketing, reflecting the discipline's evolution in the era of data analytics. Whether you're a seasoned marketer or new to the field, the MAPG is an essential guide for mastering the use of analytics in modern marketing practices.Volume I is focused on Brand and Consumer. Part I of this volume is dedicated to understanding the concepts and methods of brand sensing and brand equity. It delves into the analytic techniques used to track and profile brand image, and explains the key components of brand equity, how to measure it, and what factors drive it. It provides readers with a comprehensive framework for measuring and understanding brand equity and the tools to pursue its growth.Part II of this volume focuses on understanding consumers through qualitative and quantitative research methods, segmentation, customer satisfaction, customer value management, consumer panels, consumer analytics and big data. The volume covers the analytic tools used to extract insights from consumer transactions, which are becoming increasingly important in today's data-driven world. It also covers the use of consumer analytics and big data specifically within consumer markets.
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