Retail Channel Research Articles

Co-ops 2.0: Alternative Retail Strategies to Support a Sustainable Transition in Food Retailing

While modern food retailing is characterized by high price pressure and low-quality differentiation resulting in a limited supply of sustainably produced alternative food products, cooperative retailing structures offer additional synergies in terms of logistics and operations that hold great potential to support the expansion of sustainable produce. Many retailers in Germany are organized in cooperatives of sufficient size to generate large-scale effects while still allowing individual retailers to pursue independent business structures. Cooperatives targeted to elaborate on collectivity operate a business. In economic terms this means that scale effects are used to elaborate and help single business. In the food sector cooperative structures in Germany provide a substantial impact in food delivery and provision, especially fresh foods are very sensitive and need fast circulation. Sourcing sustainable, local and regional foods are often produced (or rather crafted) in small scale entities. This paper asks the question of how and whether cooperative marketing structures help to deliver and use scale effects of larger entities, while still collaboratively encouraging food marketing. Accordingly, this paper reports on an investigation of the main challenges faced by members of a large-scale cooperative in retailing sustainably produced products and the motives of these retailers in choosing whether or not to sell such products. Taking the case of grass-fed beef sold by retailers within a large German cooperative, the study reveals that some of the obstacles to selling this sustainable product are comparable to challenges typically encountered in other retailing channels beyond cooperative structures. However, we also find that the flexibility of the cooperative structure enables individual retailers to bring their intrinsic motivation into (sustainable) action in the marketplace while taking advantage of the support offered by the cooperative in terms of marketing and consultation, etc. This analysis confirms that personal motivation within this cooperative structure is a strong determinant for individual retailers to pursue different pathways for the marketing and sale of sustainably produced food.

A Three-Echelon Dual-Channel Supply Chain Model with Learning Effect Under the Return Policy

In today's competitive and technologically developed era, many retailers have adopted an e-channel to increase sales, in addition to the existing traditional retail channel. Although many researchers studied this issue, there is hardly any research that comprehensively considers the learning-effect and return-policy. Therefore, this research aimed to develop an imperfect production dual-channel supply chain model consisting of a supplier, a manufacturer, and a retailer. The manufacturer also has a refurbishment unit adjacent to its production hub, where it reworks all the defectives. The main objective is to maximize the supply chain profit by considering factors, such as inspection error, return policy, and learning-effect of the employees. Finally, this model is analyzed with the Leader-follower relationship strategy and an integrated approach. The research found that the integrated approach is profitable for the entire supply chain, while commodity prices can be minimized. Sensitivity analysis is also presented in this study.

Behavior in rationing inventory across retail channels

When demand exceeds available inventory, suppliers ration their inventory among customers (e.g., retail channels). While there are quantitative methods to facilitate these choices, in practice, humans play an important role in making final decisions that affect allocation efficiency. How do inventory risk and contractual differences (i.e. payment schemes) behaviorally affect allocation decisions when there is scarcity? We study inventory allocations between two retail channels: a high value channel with risk, and a low value channel without risk. The retail channels may also differ in terms of the timing and type of payments that take place. We develop theoretical predictions from behavioral models based on risk aversion, loss aversion, and mental accounting and test these through incentivized controlled laboratory experiments. When profit differences between channels are medium to large, subjects allocate significantly less inventory than the expected–profit–maximizing quantity to the risky, yet more profitable, channel and subjects with stronger risk appetite allocate larger quantities to the risky channel. More interestingly, risk appetite moderates the effect of the timing and type of payments on allocations in these settings. When profit differences between channels are small, the effect of risk appetite depends on the timing of payments. Overall, the possibility of experiencing negative payments (e.g., through buy–backs) reduces allocated quantities across settings. Our insights can inform planner assignment to tasks but also the design of support systems that provide information to planners who make allocation decisions.

Products pricing and return strategies for the dual channel retailers

Products pricing and return strategies for the dual channel retailers

Effectiveness of exclusive territories by competing manufacturers managing dual‐channel supply chains

This paper investigates a supply chain management problem concerning whether a manufacturer should apply exclusive territories of sales when the manufacturer can distribute products through dual‐channel supply chains. We first demonstrate that even when a manufacturer cannot use the direct channel, the adoption of the exclusive territories can be optimal. One noteworthy result is that when a manufacturer can use dual channels, the adoption of exclusive territories can boost manufacturer's profit even if the products are more differentiated between manufactures than when the manufacturer can use only a single retail channel. These results provide useful insights for manufacturers.

The Effect of Information Signs and Laout Position of Print Advertisement on Purchase Behavior - Moderating Effect of Brand Awareness and Price Rang

The purpose of this research is to discover the consumers’ buying behavior influence of information symbols in print advertisements, and also added the brand awareness and price range of the products as the interference, and to find out whether to increase or decrease the information symbols and page layout on purchasing behavior influence. A 3C electrical appliance retail channel in Taiwan has been applied as the research object, concentrating on the advertisement DM during the four promotions in 2013 and the sales volume. There were 1,196 product information and 136 3C electrical appliance brands. According to the variance analysis, the results indicated: First, some information symbols included the positive and negative effects on purchasing behavior; Second, overall, the interference effects only influenced low to medium brand awareness and low price range. In sum, the research generated both theoretical and practical implications and also provided future research advice. Keywords: DM; Information Signs; Layout Position; Purchase Behavior; Brand Awareness; Price Range.

The Effect of Information Signs and Laout Position of Print Advertisement on Purchase Behavior

The purpose of this research is to discover the consumers’ buying behavior influence of information symbols in print advertisements, and also added the brand awareness and price range of the products as the interference, and to find out whether to increase or decrease the information symbols and page layout on purchasing behavior influence. A 3C electrical appliance retail channel in Taiwan has been applied as the research object, concentrating on the advertisement DM during the four promotions in 2013 and the sales volume. There were 1,196 product information and 136 3C electrical appliance brands. According to the variance analysis, the results indicated: First, some information symbols included the positive and negative effects on purchasing behavior; Second, overall, the interference effects only influenced low to medium brand awareness and low price range. In sum, the research generated both theoretical and practical implications and also provided future research advice.

Profits Optimization Reasearch of Dual-Channel Supply Chain Oriented to Manufacturers Online Customization and Traditional Retail

Under the background of "Internet +", increasing manufacturers sell standard products through retail channels and sell customized products in electronic channel. The competition about dual-channel supply, relationship between production cost and delivery time and the influences of online market acceptance, product customization attribute value, price and delivery time on online customization and traditional retail markets are considered, based on the decision variables of the price of custom and standard products and the guaranteed delivery time, the Stackelberg models are constructed respectively for the manufacturer-led and retail-led supply chain under decentralized system and the overall profits maximization of the supply chain is modeled under centralized system, the existence and uniqueness of the optimal solutions is proved by the optimization theory. The optimal decisions, market demands and enterprises profits under different systems are compared through numerical examples, the relation between the sensitivity coefficients and the optimal enterprises profits are obtained through the parameters sensitivity analysis. The idea of model construction and relevant conclusions are of reference and significance for manufacturing enterprise management practices.

Consumer showrooming with supplier encroachment and omnichannel retailing

AbstractConsumers with uncertainty about product value often evaluate a product in a physical store but then purchase it online at a lower price. This popular shopping behavior is referred to as “showrooming.” Recent studies find that showrooming adversely affects the retailer. The advance of e‐commerce has attracted an increasing number of suppliers to the practice of building an online channel alongside their preexisting traditional retail channel and has encouraged numerous retailers to embark on the practice of omnichannel retailing. We explore the effects of consumer showrooming within a framework of both supplier encroachment and retailer omnichannel retailing where two types of consumer showrooming behaviors exist: intershowrooming and intrashowrooming. Our results show that both the supplier and the retailer can benefit from consumer showrooming when the consumers' hassle costs associated with visiting the retailer and the retailer's additional revenue associated with each visit are intermediate. Moreover, the retailer's omnichannel strategy may shrink this “win‐win” range because an extra online channel for the retailer will aggravate the competition effect of showrooming.

The Green Product’s Pricing Strategy in a Dual Channel considering Manufacturer’s Risk Attitude

This paper develops a two-echelon green supply chain that consists of one green manufacturer and one retailer. The green manufacturer has both online direct and offline retail channels. Considering manufacturer’s risk attitude and product’s green level, the paper constructs centralized and decentralized game models when the online channel’s demand is uncertain. Furthermore, this paper analyzes the impacts of a set of factors, including consumer environmental awareness (CEA), product green level, and risk attitude on decision-making in the supply chain. Finally, we present numerical examples. The main findings are as follows: the manufacturer and the retailer will benefit from the improvement of CEA; hence, they could invest more to obtain more profits by improving CEA; manufacturer’s risk attitude has a negative impact on the pricing and profits of the supply chain; as such, the members of the supply chain should improve the accuracy of their demand forecast, so as to minimize risks and losses resulting from uncertainty in demand.

Incorporating sales and marketing considerations into a competitive multi-echelon distribution network design problem with pricing strategy in a stochastic environment

This paper presents a multi-echelon distribution network design problem with pricing strategy in a stochastic environment, where location, inventory, and pricing decisions in retail and wholesale channels are made simultaneously. The considered network is comprised of a central warehouse, a set of distribution centers, and a set of retailers and wholesalers. The objective of the problem is to maximize the supply chain profit. The decisions include the location of distribution centers and the allocation of retailers and wholesalers to them, order-size for each distribution center and product price at retail and wholesale channels for different payment conditions. A mixed-integer nonlinear mathematical model was formulated and solved using the Lagrangian relaxation method and a Genetic algorithm. Computational results indicate that Lagrangian relaxation algorithm has good performance in terms of objective function value and runtime, even in large sized problems.

Land, sheep, and market: how dependency on global commodity chains changed relations between pastoralists and nature

Land, sheep, and market: how dependency on global commodity chains changed relations between pastoralists and nature

Peri-urban agriculture and alternative food networks in Athens: Solidarity dynamics, spatial planning challenges and institutional reforms

The article discusses the role of alternative food networks (AFN) in local food supply, food sovereignty and the preservation of peri-urban agricultural production especially in metropolitan areas. Within a context of prolonged economic and financial crisis, a growing engagement of local public and national institutions in short food supply chains helps to revitalize the local economy, strengthen rural-urban linkages and contributes to sustainable development. The analysis focuses on how newly emerging AFNs reflect the contemporary dynamics of agriculture, food-chain and land use in rural peri-urban areas of Athens. By examining the links between the current economic, environmental, social and institutional challenges the discussion focuses on the potential of formal and informal civic practices to enhance revitalization of peri-urban agriculture and support institutional change policies through a more agro-ecological approach of the metropolitan food system. A mixed method approach was used, comprising qualitative and quantitative research as well as spatial data collection and mapping representations. The analysis shows that bottom-up claims for food security had a favorable impact on the promotion of sustainable food production, consumption and distribution systems and a transformative effect on food-related public policies and the institutional framework. Gradual legitimization of many informal alternative retail channels and self-production schemes in time of crises were able to strengthen the links between urban and peri-urban environment building agricultural ‘pockets’ of resilience to food crisis. However, poor land management and zoning control are the major constraints to sustainable agricultural production and farmers’ resilience in the Athens metropolitan area.

Distribution effectiveness through full- and self-service channels under economic fluctuations in an emerging market

Retail distribution is one of the major challenges in emerging economies. These economies are volatile and filled with inefficiencies, and the representativeness of unstructured retail increases the complexity of distribution systems for consumer packaged-goods companies.We analyze 644 brands to extend the existing literature by modeling the retail distribution and market share in an emerging market according to the type of retail channel (full- and self-service channels), moderated by economic fluctuations and the market position of a brand (high- and low-share brands). Our model controls for endogeneity using instrumental variables (IVs) and accommodates heterogeneity across brands and categories by means of a fixed-effects robust regression. Our study highlights that the relationship between distribution and market share exhibits greater convexity in the self-service channel than in the full-service channel. Further, we contribute to the existing research in distribution effectiveness in emerging markets by showing the convex effect of distribution on market share could vary when the economy changes. Distribution gains are more effective in the self-service channel than in the full-service channel in times of economic decline. Also, the results indicate the higher degree of convexity in the relationship between distribution and market share for the self-service channel compared with the full-service channel is increased further for high-share brands than for low-share brands.

Manufacturer encroachment with equal pricing strategy

This study investigates the interplay between manufacturer encroachment and the manufacturer’s equal pricig strategy. Encroachment happens when a manufacturer opens up a direct channel to compete with a retailer’s traditional channel. The equal pricing strategy is that the manufacturer commits to setting a direct channel retail price that equals the price determined by the retailer in the traditional channel. We first consider the setting where one exclusive retailer sells products from a manufacturer that does not have the option of selling only through its direct channel. Our results show that the availability of the equal pricing commitment enhances the manufacturer’s incentive to encroach when the channel competition is intense and the encroachment cost is medium. Interestingly, the manufacturer’s equal pricing commitment always hurts the retailer even though it eliminates the price competition between the two channels. This is because the availability of the equal pricing commitment could motivate the manufacturer’s encroachment. Our analysis shows that the manufacturer’s equal pricing commitment always improves consumer surplus and sometimes improves the supply chain performance. However, when the retailer also sells a substitutable product from a different manufacturer or the manufacturer has the option of only direct selling, the equal pricing commitment sometimes benefits the retailer and sometimes reduces the consumer surplus.

Increasing Satisfaction With and Stickiness of Branded Mobile Apps in Online and Hybrid Brick-and-Click Retail Channels: A Perceived Value Perspective

Branded mobile apps are software applications developed by companies that carry the names and logos of the organizations and have functions designed to interact with customers using smartphones or digital devices. We find that consumer satisfaction and continued use of these branded apps are positively related to the fulfillment of utilitarian and hedonic benefits in online channels. For hybrid channels, utilitarian rather than hedonic benefits are key. Regardless of channel type, satisfaction is a key determinant of stickiness. Implications for management are discussed.

Channel Strategies for the Two-Period Closed-Loop Supply Chain with E-Commerce

The aim of this paper is to choose the effective selling channel and reverse channel for a closed-loop supply chain (CLSC) with the e-commerce. The authors formulated six single-selling and dual-selling channel two-period CLSC models in which the manufacturer manufactures new products in the first period and then collects used products by itself, outsourcing to or cooperating with the retailer in the second period. Some interesting and new insights obtained from comparison analysis and numerical experiments are as follows: (1) The leading manufacturer ought to add e-commerce channel, and customers’ e-commerce preference can increase the market demand, collecting rate, and manufacturer’s profit. (2) With the e-commerce channel and the retail channel, dual-collecting channel is the best for the manufacturer and system while the manufacturer collecting channel becomes the best when the collecting competition is relatively large. When the collecting competition exists, retailer collecting channel is the best for the retailer. (3) The market demand, collecting rate, the profits of all members and system will rise by increasing the remanufacturing level and discount coefficient.

An Investigation into Direct Selling: Information Flow and Supply Chain Structure

Amid the rapid development of technology, an increasing number of suppliers sell directly as well as through the retail channel, competing with retailers in the market with uncertain demand. Each firm has exclusive access to a signal useful in updating market forecast. The quality of the signal received exclusively by a supplier is low when it adheres to the retail channel but improves after it engages in direct selling. Firms communicate signals along two directions. Competing suppliers or retailers may exchange signals in between, while suppliers may acquire retailers’ signals with payments. A firm can voluntarily share its undisclosed signals—including its exclusive signal and the signals received from information flow—with other firms through vertical interactions as per the specified decision sequence. Firms rely on available signals to decide prices and quantities. Direct selling by suppliers produces structure and information effects. The structure effect arises as suppliers gain flexibility in balancing sales across channels. The information effect arises as suppliers receive exclusive signals of improved quality and initiate signal acquisition from retailers, influencing the availability and utilization of signals among firms in responsive decision making. Channel structure, competition intensity, and cost of direct sales are important factors affecting suppliers’ incentive for direct selling and the magnitude of the arising structure and information effects on firms’ profit performance.

Manufacturer encroachment with capital-constrained competitive retailers

With the development of e-commerce, manufacturers now have the opportunity to compete with existing retail channels by introducing their direct channels. Encroachment weakens the strength of retail channels, which may affect the manufacturer's decision on whether to provide trade credit financing to retailers. This study investigates the strategic interaction between manufacturer's encroachment and retailers’ financing choices (trade credit financing or external financing) in a supply chain consisting of a manufacturer and two capital-constrained retailers. We find that only encroachment cost below a certain threshold will make the manufacturer encroach on the market, while manufacturer encroachment is harmful to capital-constrained retailers. Surprisingly, these retailers can expand the ratios of equity financing in anticipation of manufacturer encroachment, which is a new strategic role of equity financing. In addition, the more intense the channel competition (the larger the credit gap between the two retailers) is, the less (more) likely the manufacturer will be to encroach. Further, we find that retailers prefer trade credit (external) financing at a low (high) bank loan interest rate in a non-encroachment scenario, while they prefer external financing in an encroachment scenario. However, the manufacturer always prefers the case that both retailers choosing external financing. Finally, there are financing choice conflicts between the manufacturer and retailers in the non-encroachment scenario. A high-credit retailer choosing trade credit financing may make all members achieve a Pareto improvement when the credit gap between two retailers is large; otherwise, both retailers choosing external financing is a Pareto improvement.

Decision and coordination of low-carbon supply chain under the trend of new retailing

Abstract Considering the supply chains consisting of a single manufacturer, a single new retailer and a traditional retailer and assuming that demands were affected by the manufacturer’s reduction of carbon emission, the new retailer’s service and the traditional retailer’s promotion, new retailing channel preference coefficient is defined and the supply chain decision models under different contract mechanisms are developed. The inference of how the manufacturer improves reduction of carbon emission, how the new retailer improves service and how the traditional retailer improves promotion through effective coordination mechanism is analyzed. The research results show that the cost sharing will make supply chain have a Pareto improvement to a considerable degree. The greater the marginal profit of the supplier is, the worse the coordination effect of the cooperative emission reduction mode will be. The comparative advantage of the cooperative service coordination and cooperative promotion coordination depends on the influence of service and promotion on channel demand. The greater the impact of reduction of carbon emission on channel demand is, the higher its rate should be shared by the channel retailer. The profit of supply chain is positively related to a new retailing channel preference; this indicates that opening up the ‘new retailing’ is beneficial for improving supply chain profits.