Major Retail Research Articles

Designing multi-tier, multi-service-level, and multi-modal last-mile distribution networks for omni-channel operations

The fast and dynamic evolution of e-retailing is driving structural changes in the way companies are reaching the urban consumer. Companies are offering faster delivery services, deploying collection-and-delivery points and multi-echelon distribution networks with a range of facility types, diversifying last-mile transportation modes with new types of vehicles and contracting third-party and crowd-sourcing-based transportation. In this paper, we propose an integrated modeling framework for strategic last-mile design of three-tiered multi-modal networks in omni-channel environment, with customer demand differentiated according to multiple time-differentiated delivery services and multiple product-exchange alternatives. In order to apply this framework in a large-scale demand setting and capture the granularity of customer demand and distribution network features, we extend the route cost estimation formulae from the literature and incorporate them in a three-echelon capacitated location-routing problem that optimizes the configuration of distribution networks in an integrated way. Through a number of numerical experiments, we show the impact of the diversified customer demand and the novel distribution network features on the overall network performance and demonstrate the economic benefit of an integrated approach. A real-world case study, inspired by the ongoing operations of a major omni-channel retailer in São Paulo, Brazil, serves to illustrate the real-world impact of our work.

The Effects of Quota Frequency: Sales Performance and Product Focus

This study investigates the comprehensive and multidimensional effects of quota (goal) frequency on sales force performance. The study provides a theory of salespeople’s behavior—aggregate effort and the product-type focus—in response to the temporal length of a sales quota cycle. The theory includes many realistic elements, such as salespeople’s multidimensional effort, heterogeneity in ability, product focus, and forward-looking behavior. We test the theory through a field experiment, varying the sales compensation structure of a major retail chain in Sweden. Consistent with the developed theory, shifting to a temporally frequent quota structure leads to an increase in sales performance for low-performing salespeople by preventing them from giving up in later periods within a quota-evaluation cycle, but to a decrease in sales performance for high-performing salespeople. With quotas set over short time horizons, the high-performing salespeople focus mainly on low-ticket products, resulting in a decrease in both sales volume and the sale of high-ticket products, thus reducing the firm’s profits. This paper was accepted by Eric Anderson, marketing.

Objective Facts or Misleading Hype? Associations between Features of E-Cigarette Marketing and Sales on a Chinese E-Commerce Platform.

Background: Electronic cigarettes (e-cigarettes) have been increasingly advertised and marketed in China in recent years. This study examined the practice and impact of e-cigarette online marketing on a major retail website—Tmall.com. Methods: Data were obtained by crawling 449 online pages of e-cigarette marketing. Content analysis was conducted to summarize the marketing practices for four types of e-cigarettes, and multilevel modeling (MLM) was implemented to explore factors predictive of the online sales of the products. Results: The sales volume of e-cigarettes ranged from 0 to 28,169, with the price per item varying from RMB 218.1 ($31.84) to RMB 385.5 ($56.29). Fruit (44.3%, n = 199), mint (33%, n = 148) and cream/sugar/ice (29.4%, n = 132) were the three flavors most often listed for sale online. Moreover, 63.4% (n = 285) of e-cigarette ads emphasized the role of the products as an aid to quit smoking. Nice taste (75.1%), big vapor (65.7%), high capacity batteries (67.9%), fashionable models (61.3%), discounted price (49.7%), and suitability for gifting (45.9%) were the most frequently touted product features in online ads. Type of e-cigarettes, diversity of products, number of online comments, and location of manufacturers were significantly associated with sales volume. Conclusions: Online marketing of e-cigarettes was common on one of China’s leading e-commerce websites. Sellers employed advertising strategies targeting a wide range of potential consumers—from youth to the elderly. Stricter regulations of online marketing for e-cigarettes should be enforced in China.

Comparing supermarket loyalty card data with traditional diet survey data for understanding how protein is purchased and consumed in older adults for the UK, 2014\u201316

BackgroundOur ability to understand population-level dietary intake patterns is dependent on having access to high quality data. Diet surveys are common diet assessment methods, but can be limited by bias associated with under-reporting. Food purchases tracked using supermarket loyalty card records may supplement traditional surveys, however they are rarely available to academics and policy makers. The aim of our study is to explore population level patterns of protein purchasing and consumption in ageing adults (40 years onwards).MethodsWe used diet survey data from the National Diet and Nutrition Survey (2014–16) on food consumption, and loyalty card records on food purchases from a major high street supermarket retailer (2016–17) covering the UK. We computed the percentage of total energy derived from protein, protein intake per kg of body mass, and percentage of protein acquired by food type.ResultsWe found that protein consumption (as the percentage of total energy purchased) increased between ages 40–65 years, and declined thereafter. In comparison, protein purchased in supermarkets was roughly 2–2.5 percentage points lower at each year of age. The proportion of adults meeting recommended levels of protein was lowest in age groups 55–69 and 70+. The time of protein consumption was skewed towards evening meals, with low intakes during breakfast or between main meals. Meat, fish and poultry dominated as sources of protein purchased and consumed, although adults also acquired a large share of their protein from dairy and bread, with little from plant protein.ConclusionsOur study provides novel insights into how protein is purchased and consumed by ageing adults in the UK. Supermarket loyalty card data can reveal patterns of protein purchasing that when combined with traditional sources of dietary intake may enhance our understanding of dietary behaviours.

Energy-dense, nutrient-poor food and beverage sales in Australia: where and when products are sold, and how sales are changing over time.

To quantify sales trends for key energy-dense, nutrient-poor (EDNP) foods and beverages over 5 years in Australia. The Euromonitor Global Market Information Database and linear regression models were used to estimate average annual change in sales per capita of thirteen EDNP food categories and two EDNP beverage categories (defined using Australian Dietary Guidelines) over 5 years (2012-2017 for foods and 2011-2016 for beverages). The average annual change in sales was divided by the observed sales in 2012 (foods) or 2011 (beverages) to estimate the average percentage-change in sales per capita per annum. All major retail outlets in Australia. Euromonitor Global Market Information Database sales data. Between 2012 and 2017, sales per capita per annum of frozen pizza (6 %), pastries (5 %), potato chips (crisps) (5 %), tortilla chips (3 %), chocolate confectionery (2 %), frozen processed potatoes (2 %), ice cream (2 %) and sugar confectionery (0·2 %) increased. There were no changes in sales of sweet biscuits, chocolate spreads and cakes, and sales of savoury biscuits and processed meat decreased (-2 and -1 %, respectively). Between 2011 and 2016, sales per capita per annum of sports and energy drinks increased (4 %), sales of regular (sugar-sweetened) cola (-6 %) and all non-cola soft drinks (-1 %) decreased and sales of diet cola did not change. Sales of EDNP foods and beverages generally increased or remained stable relative to population growth. Our results demonstrate the need for public health policies to reduce sales of EDNP foods and beverages.

Dynamics and structure of manufacturing bread and bakery products in the Krasnoyarsk region

Small-scale retail and food stores located within walking distance accounted for no more than 9-15% of total sales in 2018. By the end of January 2019, the price of bread increased in all stores by an average of 5-7%. And although the policy of major retailers in the regional market is declared as restraining the growth of prices, the real increase in the cost, including for essential products, has already hurt the family budget of Russians. This problem is particularly acute today. This determines the relevance of the research. In the structure of manufacturing bread and bakery products in the Krasnoyarsk region, the largest volume of bread production (about 60%) according to the data of the federal state statistics service for the Krasnoyarsk region, the Republic of Khakassia and the Republic of Tuva falls on the city of Krasnoyarsk. The Krasnoyarsk region is characterized by a wide range of bakery products. More specifically this analysis is presented in the proposed article.

Retail price discrimination and food waste

Abstract We examine a food retailer’s incentive to use a minimum quality standard as part of a quality-based price-discrimination strategy and show how price discrimination can result in a substantial level of retail food waste. Using data from a major US food retailer, we estimate a structural model of retail price discrimination and conduct a series of counter-factual experiments to demonstrate that observed retail prices are consistent with quality-based price discrimination in the retail market. Our findings indicate that quality standards on fresh produce can explain a substantial proportion ($7.5\%$) of food waste by retailers in the US.

Price gaps at the border: Evidence from multi-country household scanner data

Studies employing micro price data to examine the extent of international goods market integration tend to find that borders imply arbitrage-impeding transaction costs, inducing market segmentation. Within monetary unions, these effects are found to be very minor though, at least when online prices are considered. However, analyzing household scanner price data from three euro area member states, Belgium, Germany and the Netherlands, we document that households face (and pay) significantly different prices for identical goods across these countries in the vast majority (around 75%) of cases considered. For regions within countries, as a counterfactual, however, no evidence for such effects exists. Employing cross-border shopping information, we are able to draw direct conclusions about the question of integration of markets for a substantial number of goods. In addition, we can also derive a measure of border costs for most of them. For goods, for which no cross-border shopping take place, we provide a lower bound for border costs in the majority of cases. In line with existing evidence, our findings suggest considerable heterogeneities in border costs. Median values generally range between 15% and 20% (of the price of a good) for exact border cost estimates and between 18% and 20% for the derived lower bounds. Considering the distribution of values obtained suggests that most values lie in a range of ±40%. Since our data set comprises purchase information from all major retailers present in a given market, we are also able to examine the role of retailer heterogeneity for cross-border price gap estimates. Differences in retailer composition turn out to be fairly small, however. Grouping goods by various characteristics reveals that goods purchased more often tend to exhibit somewhat bigger border estimates. Considering the price or the goods category, however, does not yield any conclusive insights.

Streamlined data-gathering techniques to estimate the price and affordability of healthy and unhealthy diets under different pricing scenarios.

To determine the reliability of streamlined data-gathering techniques for examining the price and affordability of a healthy (recommended) and unhealthy (current) diet. We additionally estimated the price and affordability of diets across socio-economic areas and quantified the influence of different pricing scenarios. Following the Healthy Diets Australian Standardised Affordability and Pricing (ASAP) protocol, we compared a cross-sectional sample of food and beverage pricing data collected using online data and phone calls (lower-resource streamlined techniques) with data collected in-store from the same retailers. Food and beverage prices were collected from major supermarkets, fast food and alcohol retailers in eight conveniently sampled areas in Victoria, Australia (n 72 stores), stratified by area-level deprivation and remoteness. This study did not involve human participants. The biweekly price of a healthy diet was on average 21 % cheaper ($596) than an unhealthy diet ($721) for a four-person family using the streamlined techniques, which was comparable with estimates using in-store data (healthy: $594, unhealthy: $731). The diet price differential did not vary considerably across geographical areas (range: 18-23 %). Both diets were estimated to be unaffordable for families living on indicative low disposable household incomes and below the poverty line. The inclusion of generic brands notably reduced the prices of healthy and unhealthy diets (≥20 %), rendering both affordable against indicative low disposable household incomes. Inclusion of discounted prices marginally reduced diet prices (3 %). Streamlined data-gathering techniques are a reliable method for regular, flexible and widespread monitoring of the price and affordability of population diets in areas where supermarkets have an online presence.

Consumers' perceptions and responses towards online retailers' CSR

PurposeAnchored on social trust theory, social identity theory and signalling theory, this study investigates the process of how consumers respond to online retailers' corporate social responsibility (CSR).Design/methodology/approachFollowing the hypo-deductive research design, a unique model was developed to link online retailers' CSR with consumer purchase intention through brand identification and word of mouth (WOM). This model was subsequently tested and validated by conducting an online survey to 239 customers of a major online retailer in China, that is, JD.com.FindingsAnalysis using structural equation modelling demonstrates that online retailers' CSR is positively associated with consumer purchase intention, and brand identification positively mediates such an association. In addition, WOM exhibits a mediating effect on the relationship between perceived online retailers' CSR and consumer purchase intention and between brand identification and consumer purchase intention.Practical implicationsOnline retailers must endeavour to employ CSR as a strategy to enhance consumer purchase intention and behaviour. Moreover, they should develop communication programmes that highlight their engagement in CSR activities to improve their brand image and facilitate consumers' positive WOM.Originality/valueTo the best of the researchers' knowledge, this study is the first to examine the mediating roles of brand identification and WOM in the relationship between online retailers' CSR and customer purchase intention. Furthermore, this study extends current knowledge about online retailers' CSR and its potential impact in emerging economies by focussing on the context of China.

“Impact of New Concept Retail Stores on Consumer Buying Psychology in India”

Indian retail industry is making rapid strides exhibiting considerable adaptations in customer shopping experience by moving from conventional methods to digitally innovative retail stores. Maximum population in India is either millennials or generation Z that are hypercognitive, integrated with virtual and offline shopping experiences. Considering these statistical facts, major retail giants like Lifestyle by Landmark in DLF Mall of India, Noida and Central by Futuregroup in Aerocity, Delhi introduced new concept stores by 2016. Initially, a drift in consumer behavior was evident as new concept retail stores prompted change in their psychology. This research is the study of- Impact of new concept retail stores on consumer buying psychology in India. An exploratory researchis conducted in the form of questionnaire. The results indicate that visual merchandising in new concept stores have influenced customers on a subconscious level with an urge to explore what is new in the market.

The perspectives of sustainable development of Jordanian financial sector in current conditions

The Government of Jordan (the Hashemite Kingdom of Jordan) accepted quite an ambitious Economic Action Plan for 2019—2020 where the country's development priorities are clearly defined. The plan is aimed at the development and maintenance of a business-friendly environment, reforms on the financial market and in the social and economic field. However, for mitigating the economic effects caused by the regional crisis and the COVID-19 pandemic, a sufficient financial support is needed, and the Government wants to get it from the International Monetary Fund and World Bank. It is important to note the austerity measures introduced by the Government in May 2018, including an increase in income tax, which resulted in the general strike of major retail store chains and mass riots among the population. Jordan shares borders with two unstable countries: Syria and Iraq. In this regard, all the negative consequences ofwars and conflicts in these countries were an additional burden for the Kingdom's economy. Hence, Jordan must consider the possibility of maintaining its economy not in the projects and Economic Action Plans declared by the Government, but in the geopolitical area. For instance, to restore relationships with Syria and improve relationships with Iraq, develop the activity in the Palestinian territories. Well-considered and balanced political steps are a good approach to solving many local problems, moreover, Jordan has a big potential in the implementation ofvarious innovative approaches.

Analysis of Purchase History Data Based on a New Latent Class Model for RFM Analysis

Recently, it has become easier to make use of various kinds of information on customers (e.g. customers’ purchase history), due to the development of information technology. Especially in the marketing field, in fact, many companies try to employ customer segmentation for the services customization which leads to increase customer loyalty and to keep high customer retention. One of the well-known approaches for the customer analysis based on purchase history data is the RFM analysis. The RFM analysis is usually used to segment customers into several groups by using three variables; how long it has been since their last purchase, how many times they purchased, and how much they spent. However, the conventional method of the RFM analysis did not assume a generative model. Therefore, when applying to an actual data set and scoring each index of R, F, M scores, several problems occur. The main problem is that an analyst should arbitrarily decide the threshold for the scores of RFM. On the other hand, in the field of machine learning, the probabilistic latent semantic analysis is widely used for soft clustering. The latent class model enables us to cluster customers into latent classes and to calculate the assignment probabilities of each customer to each latent class. In this paper, we propose a new latent class model for the RFM analysis based on the purchase history data. The proposed model enables to decide the scoring of RFM and segment customers automatically, and the soft clustering approach helps the interpretation of the result. Furthermore, the proposed model takes account of the generation model of RFM scores. From the result of actual data analysis, it became clear that it is possible to extract latent classes that express the statistical characteristics of data well. Given a generative model estimated from the given data, it is also possible to predict future purchase behaviors of customers or to generate virtual data for simulation analysis and make decisions based on the result. We verify the effectiveness of our model by analyzing a real purchase history data of a Japanese major retail company.

Chatbots in retailers’ customer communication: How to measure their acceptance?

Currently, online retailers evaluate whether chatbots—software programs that interact with users using natural languages—could improve their customers' satisfaction. In a retail context, chatbots allow humans to pose shopping-related questions and receive answers in natural language without waiting for a salesperson or using other automated communication forms. However, until now, it has been unclear which customers accept this new communication form and which factors determine their acceptance. In this paper, we contrast the well-known technology acceptance model (TAM) with the lesser known uses and gratifications (U&G) theory, applying both approaches to measure the acceptance of the text-based “Emma” chatbot by its target segment. “Emma” was developed for the prepurchase phase of online fashion retailing and integrated into Facebook Messenger by the major German online retailer Zalando. Data were collected from 205 German Millennial respondents in a usability study. The results show that both utilitarian factors such as “authenticity of conversation” and “perceived usefulness,” as well as hedonic factors such as “perceived enjoyment”, positively influence the acceptance of “Emma”. However, privacy concerns and the immaturity of the technology had a negative effect on usage intention and frequency. The predictive power of both models was similar, showing little deviation, but U&G gives alternative insights into the customers’ motivation to use “Emma” compared to the TAM.

How to increase multichannel shopping satisfaction? An adapted Kano based stage-gate approach to select new technologies

Today, brick-and-mortar retailers with integrated online shops have many alternatives to increase their customers’ shopping satisfaction: They could invest in (for the retailers) new physical store technologies (e.g., beacons or magical mirrors if not implemented up to now), new online shop technologies (e.g., visual tagging or webcams), or in new less technology-based improvement options (e.g. events or product testing). We propose an adapted Kano based stage-gate approach to support multichannel retailers confronted with such selection problems. The approach is applied to a major European sporting goods retailer. 37 improvement options are pre-selected and evaluated by current and potential customers. It can be shown that instore returns, instore services, reserve&collect, click&collect, customization, product testing, and magical mirrors are drivers of satisfaction for the current customers and should be implemented in contrast to, e.g., geofencing or beacons. The potential customers are more technology-savvy, but show similar categorizations as a current customer segment and so confirm the selection.

A Comparative Life Cycle Assessment of Electronic Retail of Household Products

Electronic shopping is getting more and more popular, and it is not only clothes and electronics that people buy online, but groceries and household products too. Based on real-life data from a major cosmetics and household products retailer in the Czech Republic, this study set to assess the life cycle environmental impact of parcel delivery. Two archetype parcels containing common household and hygiene products were designed and packed in two distinct ways, and the environmental impact was quantified using the Life Cycle Assessment method. It showed that it is environmentally beneficial to use plastic cushions to insulate the goods instead of paper. However, the most important process contributing to the environmental burden was found to be electricity consumption in the logistics center. Hence, the importance of energy efficiency and efficient space utilization was demonstrated on alternative scenarios. Since the cardboard box the goods are packed in turned out to be another important contributor, an alternative scenario was designed where a reusable plastic crate was used instead. Even though the scenario was based on several simplistic assumptions, it showed a clear potential to be environmentally beneficial. In the study, contribution of other processes was scrutinized, as well as sensitivity to variation of parameters, e.g. transportation distances. The main scientific contribution of this work is to show the importance of logistics and distribution of products to end customers in the rapidly developing field of electronic retail of household products.

Sodium Content in Processed Food in Major Retail Outlets in Malaysia

Sodium Content in Processed Food in Major Retail Outlets in Malaysia

Exploring the potential of using nudges to promote food hygiene in the pork value chain in Vietnam

Interventions designed to reduce the burden of foodborne illness often require value chain actors to alter undesired and risky behaviours. This desired behavioural change may be supported by ‘nudge theory’, a sub-field of behavioural economics, which describes how individuals can be encouraged, or ‘nudged’, to act in ways which produce net societal benefits without restricting freedom of choice.This research aimed to investigate the use of nudges in the pork value chain in Vietnam. Key informant interviews (n = 12) were initially utilised to document the type of nudges being used within existing food safety interventions, followed by a questionnaire-based survey (n = 132) to describe the behavioural elements of pork value chain actors which could be amenable to nudging. Finally, a workshop was conducted to measure the response of stakeholders (n = 30) to various nudge elements which could be used to support future food safety interventions.Key informant interviews demonstrated that the use of behavioural nudges were a common aspect of food safety interventions in the pork value chain in Hanoi and Hung Yen Province. Survey participants reported that when considering food safety, veterinarians and actors’ peers were highly trusted, and reputation was thought to be an effective incentive to illicit behavioural change. During the workshop, stakeholders appeared aware of the major slaughter and retail contamination points and cited lack of access to improved infrastructure as the limiting factor in their ability to improve hygiene. Value chain actors reported positive responses to the concept of using posters containing photographic images as nudges and stipulated that media should reflect the local context and contain language framed to suit the target audience.We suggest that the findings of this study are used to create site specific nudges for the Vietnamese pork industry targeting key value chain actors, such slaughterhouse workers and traditional retailers, which should be tested in the field to investigate their effectiveness.

Cross-docking or traditional warehousing: what is the right distribution strategy for your product?

PurposeThe objective of this paper is to investigate the impact of products' characteristics on the performance of three distribution strategies: traditional warehousing (TW), cross-docking pick by line (XDPL) and cross-docking pick by store (XDPS).Design/methodology/approachBased on a case study of an FMCG “Fast Moving Consumer Goods” company and a major French retailer, we empirically analyse the impact of the products' characteristics on the performance of the three distribution strategies. We consider a three-echelon supply chain composed of one supplier DC, one retailer DC and multiple retailer stores. The inventory at each echelon is controlled according to an order-up-to (OUT) level policy. The demand is forecasted by means of a single exponential smoothing method. A sensitivity analysis is also conducted to analyse the impact of the supply chain parameters on the comparative performance of the strategies when the parameters' values deviate from the empirical base case.FindingsThe empirical investigation shows that the use of XDPL results leads to an increase in the supply chain total cost, whereas XDPS reduces the cost. Moreover, we show that for a service-level target, cross-docking strategies should be selected for products with low variability, high shelf space, low value and short lead-time. For an inventory reduction target, these strategies should be selected for products with high demand volume. We also propose a managerial framework for choosing the right strategy for each product.Originality/valueThis paper fills a gap in the literature by presenting empirical results based on a real business case of a multi-echelon supply chain. Both cost and service are used to evaluate the performance of the strategies.Research limitations/implicationsOur work has the limitation to ignore the transportation cost implications when selecting the right distribution strategy. Hence, including such cost in the analysis would constitute an interesting extension of this work. Moreover, our empirical analysis represents a practical rich context that makes the scope for transferability of findings learned from this article substantial. However, for the generalisability of the findings, larger datasets in the retail supply chain would be interesting to consider

The effectiveness of micro-learning in retail banking

In order to remain competitive in a global technological revolution, the learning and development departments of businesses are focusing on the emerging concept of micro-learning, to support the fast-paced, multitask orientated and digitally savvy learners. A survey was conducted among 7 673 employees of one of the major retail banks in South Africa, to determine the effectiveness of micro-learning and establish whether micro-learning is effective, as well as identify gaps and recommend strategies to close them. Through inferential statistical analysis of the data, it was concluded that learners reacted positively to micro-learning, the acquired relevant knowledge using micro-learning which improved work performance and business metrics. Although the micro-learning programme was deemed effective for the vast majority (80%) of the participants, two gaps were identified, namely, micro-learning did not fully embrace the social tenet of learning, and it is also not exempt from the distractions that learners experience. It is recommended that any organisation pursuing a micro-learning programme should incorporate a social knowledge-sharing element into the programme and provide users with tools to develop self-control and self-regulation habits needed to conquer constant distractions.