Consumer Electronics Retailers Research Articles

Database Submission—The ISMS Durable Goods Data Sets

This paper describes two new data sets available to academic researchers (at http://www.informs.org/Community/ISMS ). The first is a panel data set containing the transactions of 19,936 households made over the period from December 1998 to November 2004 at a major U.S. consumer electronics retailer. There are a total of 173,262 transactions, including purchases and returns of products as well as extended warranties. There are 16 product categories and 292 subcategories, ranging from big-ticket items such as televisions to small-ticket items such as CDs and batteries. The second data set features a field experiment for a Christmas promotion that took place in December 2003 in the form of a direct mailing sent to a randomly selected group of households at the end of November 2003. We describe the data and the potential research issues that can be studied using these two durable goods data sets.

The ISMS Durable Goods Datasets

This paper describes two new datasets available to academic researchers. The first is a panel dataset containing the transactions of 19,936 households made over the period from December 1998 to November 2004 at a major U.S. consumer electronics retailer. There are a total of 173,262 transactions, including purchases and returns of products as well as extended warranties. There are 16 product categories and 292 sub-categories, ranging from big ticket items such as televisions to small ticket items such as CDs and batteries. The second dataset features a field experiment for a Christmas promotion that took place in December 2003 in the form of a direct mailing sent to a randomly selected group of households at the end of November 2003. We describe the data and the research issues that can be potentially studied using these two durable goods datasets.

Revisit Intention of Consumer Electronics Retailers: Effects of Customers’ Emotion, Technology Orientation and WOM Influence

This paper elucidates the relevance of emotions on consumer behavior and marketing management, particularly retail management. The purpose of this research is to investigate the factors effective on revisit intention of consumer electronics retailers. According to purpose, the study empirically tests a model which proposed that technology orientation and customers’ emotion states have impact on revisit intention. The results indicate that they have a direct effect on revisit intention. In addition the findings confirm the hypothesized moderating effect of individual trait, namely influence of Word-of-Mouth intention on consumers’ positive emotions. Managerial implications and future research directions are also discussed.

THE EFFECT OF MOST-FAVORED CUSTOMER CLAUSES ON PRICES*

We study the effects of introducing a Most-Favored Customer (MFC) clause on price competition among major consumer electronics retailers. Our data spans the periods before and after the introduction of an MFC clause by Best Buy, which occurred between April 1, 2003 and March 31, 2004. After controlling for various factors (including product life-cycle and seasonality effects), we find that, on average, Best Buy lowered its prices by 1.6% after introducing the MFC clause. Its competitors responded by cutting prices further: Buy.com by 3.5%, Circuit City by 2.2%, CompUSA by 3.2%, and Sears by 0.4%. We conclude that Best Buy's MFC adoption reduced prices.

An Investigation of the Sources of Store-Based Retailers' Early Entrant Advantages: Market and Resource Factors

The focus in this study is to explore the sources of the potential early entrant advantages in retailing markets. Are the sources of retailers' early entrant advantages external market factors, internal resource factors, neither, or both of these two types of factors? The results show that for store-based consumer electronics retailers, early entrant advantages result from two factors: non-firm-specific factors unique to the retailing industry subfield of consumer electronics retailing and firm-specific operations capability factors. However, in this study, firm-specific advertising capability factors did not seem to make any significant contribution to early entrant advantages.

The Effect of Most-Favored Customer Clauses on Prices

We study the effects of introducing a Most-Favored Customer (MFC) clause on price competition among major consumer electronics retailers. Our data spans the periods before and after the introduction of an MFC clause by Best Buy, which occurred between April 1, 2003 and March 31, 2004. After controlling for various factors (including product life-cycle and seasonality effects), we find that, on average, Best Buy lowered its prices by 1.6% after introducing the MFC clause. Its competitors responded by cutting prices further: Buy.com by 3.5%, Circuit City by 2.2%, CompUSA by 3.2%, and Sears by 0.4%. Our empirical results are robust to a variety of measures and estimation methods. We conclude that Best Buy's MFC adoption reduced prices in the consumer electronics retail industry.

Retail format choice in the US consumer electronics market

PurposeThe purpose of this paper is to provide a general understanding of retail format choice among consumer electronics shoppers in the US market.Design/methodology/approachUS consumer electronics shoppers (n=252) were surveyed via telephone. Linear regression was used to evaluate the data.FindingsProfiles shopper groups who frequent specific retail formats (department stores, specialty stores, discounters, category killers, internet‐only retailers, and catalogs) based on demographic characteristics (gender, age, education, income) and desired retail attributes (price competitiveness, customer service, product selection, presence of new products, hours of operation, ease of access to the retailer, store atmosphere).Research limitations/implicationsAlthough general observations and predictions about the demographic variables and important retail attributes for shopper groups are possible, future studies could expand upon this exploratory work by initiating comparisons of specific retail formats and examining cross‐shopping behavior among consumer electronics shoppers.Practical implicationsThis paper provides consumer electronics retailers with specific knowledge of the attributes that consumers consider to be important when making format choices and identifies the demographic characteristics of shoppers who frequent each retail format.Originality/valueThis exploratory study uses demographics and retail attributes to profile consumer electronics shoppers of each major retail format in the USA. The paper is unique because the investigation of retail format choice among consumer electronics shoppers has been very limited.

Store Manager Incentive Design and Retail Performance: An Exploratory Investigation

Store managers perform multiple tasks within a store, and the way in which they are evaluated and rewarded for these tasks affects their behavior. Using empirical data from multiple stores of a consumer electronics retailer, Tweeter Home Entertainment Group, we highlight the extent to which store manager incentive design impacts store manager behavior and, consequently, retail performance. More specifically, we describe the shift in store manager behavior resulting from a change in incentives, which, in part, altered the importance of sales relative to inventory shrinkage in the store manager compensation plan. Store managers, following this change, directed less attention to the prevention of inventory shrinkage and more toward sales-generating activities and made different process choices within the store. We observed increases in the level of inventory shrinkage and sales within these stores. Controlling for alternative drivers of sales and inventory shrinkage, we find this change in incentive design to be associated with a profit improvement of 4.2% of sales. This work indicates that altering how store managers are compensated impacts retail performance. Moreover, our findings underscore the importance of balancing the rewards given for different types of activities in contexts where agents face multiple competing tasks.

24 × 7 @ Full Speed: Accelerated Time to Market

‘It's only a web site. What could be so difficult about that?’ This quote is from the cafeteria of a start-up business funded by a North American retailer, after the disastrous ‘Black Friday’ of 2000, during which its web site experienced systemic failure. This case describes the dynamics, complexities and consequences of fast tracking an e-business start-up. This consumer electronics retailer created one of the most visited retail web sites, from concept to operation in 6 months. Market analysts were predicting a major increase in online sales while consumers were adopting the Internet at a rate faster than any previous technology. Meeting the multi-channel demands of the dynamic and competitive environment required operational balance, stability, innovative flexibility, organizational fit and the alignment of resource capabilities with technology. This case challenges the reader to comment on how a large company positioned itself and integrated the necessary competencies to compete successfully in a developing market by establishing a spin-off operation, separate from the main company.

Postponed variety creation: case study in consumer electronics retail

PurposePostponement is known as a way to reduce risk and inventories while still providing high product variety and acceptable response times. The paper is a case study that uses simulation for quantifying these benefits for a consumer electronics company.Design/methodology/approachImprovement potential is first evaluated qualitatively through interviews with dealers of the case company. Next, the benefit of postponement is evaluated quantitatively using discrete‐event simulation with data from operational ERP systems. The conclusions identify conditions under which postponement is beneficial in retail.FindingsIn the case company, shop inventory is necessary for high‐volume and low‐variety products. Postponing variety creation to shops has the potential to decrease inventories for these products by 40‐80 per cent. The benefits of postponement depend on delivery speed requirement, product value, product variety and shop size.Research limitations/implicationsMany contributions on postponement have been conceptual. This study contains a quantitative test. The study considers both the spatial dimension (where) and the temporal dimension (when) of postponement.Practical implicationsThe research was sufficiently successful that the company implemented the delivery concept arising from the results. Corresponding benefits seem possible for other manufacturers and retailers of consumer goods.Originality/valueThe contribution is real‐life quantitative evidence of how modular product architecture can be utilised to improve operational supply chain performance.