Merchandise Value Research Articles

Flagship Entry in Online Marketplaces

In the world of omnichannel retail, some brands open a flagship store at online marketplaces, while others avert it. Focusing on a large e-commerce platform, we empirically study how flagship entry affects consumers, the platform, and various sellers on the platform. We find flagship entry may benefit consumers by expanding the choice set, by intensifying price competition within the entry brand, and by improving consumer perception for parts of the platform. In the meantime, flagship entry cannibalizes the sales of same-brand sellers, while other brands may gain as the buyer base expands on the platform. Counterfactual simulation suggests that flagship entry improves the gross merchandise value (GMV) of the platform but hurts existing sellers of the entry brand. On average, the effect on consumer welfare is more positive if the flagship entry is from a non-prominent brand than from a prominent brand, because consumers tend to lower their willingness to pay for individual sellers upon a prominent flagship entry. In hypothetical scenarios where flagship entry were accompanied by constraints on other same-brand sellers, the reduced competition would benefit the flagship store but hurt consumers.

Airport Servicescape, Approach Intentions, and the Mediating Role of Perceived Merchandise Value and Shopping Value1

AbstractDespite the large body of work on approach intentions in airport servicescapes, literature considering cognitive evaluations as a possible mediator is lacking. The aim of this study is to address this gap in literature by investigating the effect of an airport servicescape environment on approach intentions through cognitive evaluations on the foundation of the stimulus–organism–response framework. Data of 484 passengers at Chinese international airports were collected. Overall, perceived merchandise value significantly mediated the relationship between airport servicescapes and approach intentions; perceived merchandise value and shopping value acted as chain mediators between airport servicescapes and approach intentions. The theoretical implications are discussed, and the results could be used by airport stores to achieve higher approach intentions.

Queueing Versus Surge Pricing Mechanism: Efficiency, Equity, and Consumer Welfare

At the end of 2017, the leading ride-hailing platform DiDi Express replaced the commonly used surge pricing mechanism with a queueing mechanism, called the virtual queueing mechanism, in a number of cities across China to mitigate public relations pressure. To explore the benefits of the virtual queueing mechanism over the surge pricing mechanism in terms of operational efficiency, equity, and consumer welfare, we build a model of a data-driven state-dependent open queueing network, which we show can be approximated by an M/M/s+M queueing model with balking and reneging. We derive closed-form expressions for multiple performance metrics, including response rate, demand satisfaction rate, gross merchandise value (GMV), consumer surplus, and degree of inequality. Our theoretical and numerical analyses show that: (1) the virtual queueing mechanism outperforms the surge pricing mechanism in terms of consumer surplus, but is not as advantageous to generate GMV; (2) with respect to the response rate and demand satisfaction rate, the virtual queueing mechanism performs increasingly better than the surge pricing mechanism as demand increases; (3) the virtual queueing mechanism contributes to a more equitable ridesharing system, in the sense that consumer surplus is distributed across different classes of riders in a more balanced way. Using real data, we conduct a case study in Beijing, which verifies all the aforementioned results. The case study further finds that the response and demand satisfaction rates are significantly correlated with driver idleness.

Suitability of Valuation Methods to E-Commerce Industry – A Case Study

Today’s business world is witnessing a big revolution in doing business. Now the commerce has a prefix ‘e’ and the market is shifting onto the clouds. With introduction of e-commerce and government inclination towards digital economy, behavioral shift toward internet based transaction has gained momentum. E-commerce or internet based business are now a part of mainstream commerce. The changing way of doing business necessitates adaptation in the way a business is being valued. There are various valuation methods namely Asset based, Earning based and Cash flow based which were used and are also relevant to internet based business, however, consideration required towards new emerging operating indicators. Through this case study we will try to evaluate the popular valuation methods for its suitability to E-commerce based industry where many newly introduced operating indicators such as Gross Merchandise Value (GMV), Customer monetization rate, customer base measuring units Mobile MAUs has impacts on business valuation.

The Effects of Government Licensing on E-Commerce: Evidence from Alibaba

Using proprietary data from Alibaba, we examine how the 2015 Food Safety Law (FSL) affects e commerce in China. The FSL requires most food sellers on e-commerce platforms to obtain a valid online license for retail food handling. Because the FSL was rolled out progressively, we have a rare opportunity to observe a gradual transition from voluntary certification to partial licensing and mandatory licensing. Data summary shows that, conditional on sellers with valid licensing information, those that had a better online reputation and more online food sales before the FSL tend to display their FSL license earlier on the platform, and buyers are more willing to transact with a seller after she displays her FSL license. This positive response is stronger for younger and less reputable sellers, suggesting that the license provides useful information in addition to what consumers observe on the platform. To identify the causal impact of the FSL, we compare food and non-food categories via synthetic control matching. We find that the average quality of surviving food sellers has improved after partial and mandatory licensing, partly because those who are unwilling to obtain the FSL license must exit the platform. Despite an increase in seller concentration, the platform's gross merchandise value in the food category did not decline post FSL, nor did the average sales price increase significantly one year into the full enforcement of the FSL. This suggests that the FSL does not hamper the long-run performance of the regulated market, probably because it has enhanced seller quality and market transparency on the platform.

The Effects of Government Licensing on E-Commerce: Evidence from Alibaba

Using proprietary data from Alibaba, we examine how the 2015 Food Safety Law (FSL) affects e-commerce in China. The FSL requires most food sellers on e-commerce platforms to obtain a valid, online license for retail food handling. Because the FSL was rolled out progressively, we have a rare opportunity to observe a gradual transition from voluntary certification to partial licensing and mandatory licensing. Data summary shows that, conditional on sellers with valid licensing information, those that had a better online reputation and more online food sales before FSL tend to display their FSL license earlier on the platform, and buyers are more willing to transact with a seller after she displays her FSL license. This positive response is stronger for younger and less reputable sellers, suggesting that license provides useful information in addition to what consumers have observed on the platform. To identify the causal impact of the FSL, we compare food and non-food categories via synthetic control matching. We fi nd the average quality of surviving food sellers has improved after partial and mandatory licensing, partly because those who are unwilling to obtain the FSL license must exit the platform. Despite an increase in seller concentration, the platform's gross merchandise value (GMV) in the food category did not decline post FSL, nor did the average sales price increase significantly one year into the full enforcement of the FSL. This suggests that the FSL does not hamper the long run performance of the regulated market, probably because it has enhanced seller quality and market transparency on the platform.

Growth and the challenges of start- up entrepreneurs in India – an analysis

A startup is a young company that is just beginning to develop. Startups are usually small and initially financed and operated by a handful of founders or one individual. These companies offer a product or service. It is not currently being offered in a different place in the market. In the early stages, startup companies‟ expenses tend to exceed their revenues as they work on developing, testing and marketing their idea. As such, they often require financing. Startups maybe funded by traditional small business loans from banks or credit unions, by government sponsored Small Business Administration loans from local banks, or by grants from nonprofit organizations and state governments. Incubators can provide startups with both capital and advice, while friends and family may also provide loans or gifts. A startup that can prove its potential may be able to attract venture capital financing in exchange for giving up some control and a percentage of company ownership. Over 58 percent of the rural households depend on agriculture as their principal means of livelihood. The Indian food and grocery market is theworld‟s sixth largest, with retail contributing 70 percent of the sales. The Indian food processing industry accounts for 32 percent of the country‟s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.The online food delivery industry grew at 150 percent year on year with an estimated gross merchandise value of 300 million in 2016. The study focuses on empowerment of startups through innovation and design and to accelerate distribution of the startup movement.

The Relationship Between Malaysian Supermarket In-Store Shopping Experiences and Positive Word-of-Mouth

Attitudinal loyalty such as customers’ willingness to spread positive words of mouth has received less attention compared to behavioural loyalty (e.g., reptronage intention) in retail studies, particularly in the context of supermarket. It is argued that supermarket consumers should be willingly share positive words of mouth when they are satisfied. The effect of Malaysian supermarket in-store experiences (convenience, merchandise value, internal shop environment, interaction with staff, merchandise variety, presence interaction with other customers, in-shop emotion) on customer satisfaction and mediating effect of customer satisfaction on the relationship between in-store experiences and positive WoM were examined. The results show significant relationship between customer satisfaction and willingness to spread positive WoM. Convenience and in store emotion have significant relationships with customer satisfaction, while the other in-store experiences have no significant effects on satisfaction. Customer satisfaction played mediation roles between the relationships between convenience, merchandise variety, interaction with staff and in store emotion with positive WoM. The findings provide useful insights to Malaysian supermarket retailers in understanding their target markets to encourage more positive WoM.

Sustainability of Inorganic Growth in Online Retail by Snapdeal: A Case Study

This paper is meant to examine the impact of financing, rapid inorganic growth on the viability of e-commerce Start up. The inorganic growth strategy used by emerging start ups by acquiring firms to expand the goods and services offered and improve the gross merchandise value has been evaluated. Snapdeal had been a contender for the top slot in online retail segment in India. Suddenly a company with 9000 employees had gown down to 200 employees. The case examines the journey of Snapdeal and the implications of aggressive growth and relying on few big investors. Snapdeal focused on a strategy of leaner organisation after failing in rapid expansion and acquisitions. The strategy has yielded positive results and the losses have reduced from Rs 4,638.9 crore in FY2016-17 to Rs. Rs 440.7 crore in FY 2017-18. It is found that aggressive inorganic growth fueled by big ticket investments and relying on few large investors can lead to disastrous results if fast growth is not sustained and major financers back out. Snapdeal should focus on developing satisfied customer base, efficient operations, satisfied employees, diversified financing options and organic growth to become profitable and take on the market leaders with equity financing from stock markets.

Differentiated Fashion Recommendation Using Knowledge Graph and Data Augmentation

E-commerce recommender systems (RSs) can help users quickly find what they need or new products they might be interested in. To continuously enhance user trust in the website, improve page visits and dwell time, and most importantly, increase gross merchandise value (GMV), it is crucial to understand and capture the important information hidden in the data, which has a great impact on user choice. The fashion e-commerce websites can collect the attributes of items and users as well as the user purchase behaviors, but lack the fine-grained classification of the items and the implicit relationship between items and users. This paper focuses on Amazon fashion dataset, one of the most widely used datasets in the fashion field. A differentiated recommendation framework is proposed that provides different recommendation paths for active and inactive users to improve the overall recommendation quality. In the framework, a data augmentation algorithm based on transfer learning is proposed to filter out the irrelevant items and label items with fine-grained tags, and a user-item knowledge graph is built to discover the potential relationship between items and users. Finally, a differentiated recommendation strategy is put forward to make different recommendations for users with different characteristics. The experimental results show that through data augmentation algorithm to improve data quality, factorization machine model produces higher recommendation accuracy, the constructed knowledge graph can alleviate the cold start problem for recommendation, and the differentiated recommendation strategy has achieved better recommendations for both active and inactive users.

Telepath: Understanding Users from a Human Vision Perspective in Large-Scale Recommender Systems

Designing an e-commerce recommender system that serves hundreds of millions of active users is a daunting challenge. To our best knowledge, the complex brain activity mechanism behind human shopping activities is never considered in existing recommender systems. From a human vision perspective, we found two key factors that affect users’ behaviors: items’ attractiveness and their matching degrees with users’ interests. This paper proposes Telepath, a vision-based bionic recommender system model, which simulates human brain activities in decision making of shopping, thus understanding users from such perspective. The core of Telepath is a complex deep neural network with multiple subnetworks. In practice, the Telepath model has been launched to JD’s recommender system and advertising system and outperformed the former state-of-the-art method. For one of the major item recommendation blocks on the JD app, click-through rate (CTR), gross merchandise value (GMV) and orders have been increased 1.59%, 8.16% and 8.71% respectively by Telepath. For several major ad publishers of JD demand-side platform, CTR, GMV and return on investment have been increased 6.58%, 61.72% and 65.57% respectively by the first launch of Telepath, and further increased 2.95%, 41.75% and 41.37% respectively by the second launch.

For Indian online shoppers, have saying and doing parted ways?

AbstractGrounded in the theory of planned behavior (TPB) and based on both perceptual as well as behavioral data, the study explores e‐service quality (e‐SQ) dimensions’ influence on merchandise value perception (MVP) and how these value perceptions, in turn, impact shopper loyalty intention, finally leading to word‐of‐mouth (WOM) and store patronization behavior. The model was tested for measurement and structural validity, mediation by MVP, and moderation by gender. Findings suggest that: (1) e‐SQ dimensions of efficiency and fulfillment have direct effect on MVP; (2) MVP is a key mediating variable facilitating “indirect‐only” mediation between e‐SQ dimensions and online shoppers’ loyalty intentions; (3) mediation by MVP is not moderated by gender; (4) strong association between shoppers’ loyalty intention and intention to spread positive WOM; and (5) “saying” and “doing” are incompatible because online shoppers’ loyalty intentions or WOM do not translate into store patronization behavior.

Second-hand clothing commerce and the mobility cultural configuration: A journey to manhood

Abstract Second-hand clothes, advertised as brand new commodities, sold in street markets or small shops are a common landscape of contemporary Dakar. After the economic crisis that has stricken Europe since 2008, and the implementation of FRONTEX, international migration from Senegal to Europe has declined and newer forms of mobility and motility have emerged. The sale of second-hand clothing from China, Europe and the United States seems to be the main resource for some young men trying to access the economic and social space of migrants, and this is a popular outlet on the path to becoming an active member of society by gaining the social and economic status of grown men. The motility of their merchandise through transnational spaces bestows upon these young traders an aura of motility, which increases their merchandise value and their own social status, blending them into the reality of returning migrants. The objective of this article is to open up a discussion about the close link between second-hand clothing commerce, migration and the experience of manhood in contemporary Senegal, taking a cultural approach. The focus of this research is the ways in which young men use the cultural frameworks of migration in the selling of second-hand clothing in order to gain the resources and the social status of men. This article adds to the growing academic research that studies migration not only as a space–time movement, but also as a cultural configuration involving interactions between the structures, contexts and actions of those who move, those who stay and those who receive migrants.

Relative importance of retail store image and consumers characteristics on the perception of value and willingness to pay a premium price

Retail store image, customer evaluation of merchandise value and intention to purchase have been studied as a most important constructsof the retail domain. It is considered from previous research, that store image is expressed in terms of tangible and intangibledimensions as assessed by consumers. Consumers are affected by the store’s attributes and consider image associations in order toassess perceived benefits and attitudes. This study develops a proposition that store image makes an influence on the level of perceivedproduct value. As recent research has shown, perceived value is related to willingness to pay a higher price. Accordingly, thisstudy posits a path model of store image, product value perception and willingness to pay a premium price. The proposed theoreticalframework entails insights on the differences in retail image – customer attitude relationship according to customer characteristics –gender and income. Therefore I hypothesize the impact of gender and income on the perceived merchandise value and willingnessto pay a premium price. Analyzing the path model, this paper investigates the influence of retail image and customer characteristicson the important retail outcomes. The results suggest a link of retail store image and perceived value of merchandise, also the hypothesizedassumptions of the link of customer income and endogenous variables of perceived value of merchandise and willingnessto pay a higher price were supported by the results. Findings of the structural model do not support the effect of the gender on therelationship between retail image and resultant variables of perceived value of merchandise and willingness to pay a higher price. KEY WORDS: retail store image, perceived value of merchandise, willingness to pay a higher price. DOI: http://dx.doi.org/ 10.15181/rfds.v9i1.602

A Systematic Approach to Scale Development in Tourist Shopping Satisfaction

Tourism shopping has been acknowledged as a primary travel motive. Yet research on the underlying dimensions, antecedents, and consequences of tourist shopping satisfaction has not received adequate attention. The objective of this article is to explore tourist shopping satisfaction and examine its dimensionality. The authors systematically develop a scale that conceptualizes tourists’ shopping satisfaction as a four-dimensional construct that reflects tourists’ satisfaction of service product and environment, merchandise value, staff service quality, and service differentiation during their shopping excursion. Using this scale, the authors examine a structural model linking tourist facilities, as major destination attributes, to shopping satisfaction and shopping experience. This article ends with a discussion of the implications and future research directions.

Customer value scale development: Merchandise and differentiation value

The present study outlines the development of a scale for customer value measurement and begins with a brief discussion of the origins of the customer value construct with two aspects: merchandise and differentiation value. In order to scale development after literature review, the related items were created. In this respect, employing literature on construct of customer value and seeking opinions of marketing experts. After test of validity and reliability in the next step, in order to conduct the main study, students in graduate and Ph.D. program of studies in Tehran area who have at least some experiences of buying the intended products (laptops and perfume and eau de cologne) were used. In total, 278 questionnaires were completed and gathered. In the other step, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used. Final measure was designed consisting of 14 items; 8 items for merchandise value and 6 items for differentiation value. The present research showed that customer value in addition to physical and material aspects and comparison of product prices, also includes feeling and enjoyment associated with purchasing product and in some products, the latter type of value is more prominence. Key words: Customer value, merchandise value, differentiation value, utilitarian value, hedonic value.

Urban place marketing and retail agglomeration customers

Through identifying the attributes of a place that have an influence on the patronage behaviour of urban retail customers, this paper presents a conceptual model that proposes direct and indirect antecedents regarding the different retail-related dimensions associated with urban place attractiveness. An empirical study was conducted whereby the model was tested by surveying approximately 500 actual customers at the time they visited a particular town centre for the purposes of shopping. The results showed that the retail tenant mix, the merchandise value, and the atmosphere had a direct impact, and the product range and the sales personnel an indirect impact upon the evaluation of attractiveness. Furthermore, a number of additional effects towards these antecedents were identified with respect to parking conditions, the non-retail tenant mix, manoeuvrability, and orientation. This revealed that retailing activities were a major driver of attractiveness for an urban place. The practical implication of these findings suggests that place marketing activities should be proactive in supporting and enabling retailers in fulfilling their roles.

The moderating roles of shopper experience and store type on the relationship between perceived merchandise value and willingness to pay a higher price

In the retail domain, we consider the moderating influence of shopper experience (high versus low experience) and store type (high- versus low-priced stores) on a model that identifies three distinct routes (economic, affective and informational) from perceived merchandise value to willingness to pay a higher price. Each route accounts for a different outcome arising from merchandise value and leading to willingness to pay a higher price. Analyses of data obtained from a sample of 600 shoppers at four grocery stores provide results for specific hypotheses related to each moderator and each distinct route. The results of multiple sample analyses show that the economic route is stronger for high experience shoppers as well as for high-priced stores. Findings pertaining to hypotheses for moderation of both the affective and informational routes are mixed. We discuss the importance of these findings for retail managers as well as for future research.

Investigation of the Effects of Stores’ Tenant Mix and Internal and External Environmental Conditions on Customer Satisfaction from Shopping Centers in Iran

The research aims to determine the attractiveness of factors of Iranian shopping malls from the shopper’s point of view. Researchers used a conceptual framework that proposes significant impact between store tenant mix, internal and external conditions from shopping centers, and different dimensions of attractiveness. Then they test the hypotheses using a survey of 385 consumers of two shopping centers of Iran, to identify shopping mall attractiveness. A structural equation model using a correlation matrix with maximum likelihood was estimated by LISREL 8.8. The results indicate that from the attractiveness factors, retail tenant mix and atmosphere were the most influential factors in shopping centers and retail tenant mix was strongly affected by product range and to some extent by merchandise value. Thus, management teams of shopping malls can increase their mall attractiveness by identifying optimal retail tenant mix and protect their establishments with appropriate atmosphere.

Consequences of Value in Retail Markets

We suggest that merchandise value, affect and two types of loyalty are related in the retail domain. Based on ideas from cognitive psychology on the structure of value we suggest that merchandise value is directly related to repurchase loyalty but indirectly related to attitudinal loyalty via the construct of store affect. Additionally, our model proposes that attitudinal loyalty is related to willingness to pay a price premium while repurchase loyalty is not. We also control for the effects of store familiarity and convenience. We test our hypotheses in three studies and find that, in general, our model is well supported at the level of both individual consumers and stores. Additionally, we find that perceived retailer differentiation moderates the effect of merchandise value on store affect.