Retail Channel Research Articles

The Effect of Multi Channel Retailing, Cooperation Synergity and Accounting Information Systems on Business Development Strategies that Impact on Business Performance

In this study the researchers chose the research object, namely a building material trading company in Sampit, Central Kalimantan named PT. Samudra Mas Group. The urgency of this study is to determine whether the multi-channel retailing variable, cooperation synergy and accounting information systems affect business development strategies and ultimately have an impact on company performance. This is to ensure the use of a business development strategy for the next 5 years. The study was conducted using respondents who are employees of PT. Samudra Mas Group, which has director positions to middle management and has the authority to make decisions in company operations. Respondents amounted to 70 people. This research measurement method using Smart PLS Professional 3.0. Pulling data by observation, interviews and distributing questionnaires. The results showed that multi-channel retailing, synergy of cooperation and accounting information systems significantly influence business development strategies. As well as a business development strategy to mediate multi-channel retailing that affects business performance.

Strategic Analysis of Dual-Channel Green Supply Chain with an Unreliable and Competitive Supplier

With the increasing public awareness of environmental issues, green production has become an important issue for supply chain management. This study proposes an analytical model to investigate the dual-channel green supply chain decisions of a retailer and a competitive supplier; the latter suffers from unreliable production yield. The retailer’s environmental responsibility is considered as a two-echelon supply chain in which the retailer promotes the green product in their marketplace through green marketing. This problem is analyzed and modeled under three available channel strategies, considered in the order in which channel selections are made: a single online channel strategy, a single retail channel strategy, and a dual-channel strategy. The results show that the wholesale price of the manufacturer and the green-marketing effect of the retailer increase with the improvement in the level of the green production technology. Interestingly, the result reveals that a retailer’s expected profit is unimodal in the production technology level under the dual-channel strategy, which suggests that the retailer may not be incentivized to encourage the manufacturer to improve its production technology once a threshold has been reached. Further, we develop the channel selection: the retailer is strictly better off in the single retail channel scenario than that in the dual-channel scenario; however, while the unreliable supplier is better off in the single online channel scenario than that in the single retail channel scenario, its best option is still the dual-channel strategy. Additionally, numerical results illustrate that the expected profits of supply chain parties decrease with the improvement in customer acceptance of the online channel.

Predicting Under- and Overperforming SKUs within the Distribution–Market Share Relationship

This research presents a retail analytics application which uses machine learning (ML) to identify and predict under- and overperforming consumer packaged goods (CPGs) using retail scanner data. Essential to measuring market performance at the SKU level is the relationship between distribution and market share (the velocity curve). We validate that ML can reproduce the velocity curve, and ML is further used to predict underperforming, in-line performing, and overperforming SKUs relative to the velocity curve, based on a range of variables (SKU features) at a point in time. Our ML approach can correctly predict 83% of SKUs as under-, in-line-, or overperforming based on their characteristics. The research analyzes 9,321 SKUs of 2,565 brands across seven product categories of CPGs which were sold in 8,117 stores from 49 different retail chains of five different retail channels located in the US states of California, New York, Texas, and Wisconsin. The retail stores comprise convenience stores, drug stores, food stores, liquor stores, and mass merchandise retail stores. The data is Nielsen retail store scanner data for the calendar year 2014. The relationship between distribution and market share is a market-wide proxy for the ratio of relative sales in a category to, for example, aggregate shelf space, a key retail productivity metric. We further find indications that the distribution of SKUs across different store sizes, the stores’ category specialization, the line length of the brands, the overall performance of the parent brand, and sales consistency are the most important characteristics for the prediction of market share performance beyond the velocity curve. The methods and results presented will help CPG marketers (suppliers and retailers) understand which SKUs are under-, in-line-, or overperforming and the potential factors contributing to that performance. Optimizing assortments and portfolios is essential to decrease failure rates of individual SKUs. ML approaches can evolve to complementary support tools for such management problems.

The impact of COVID‐19 on food retail and food service in Canada: A second assessment

COVID‐19 continues to impose a series of unique challenges on the food retail and food service sectors in Canada. In May 2020, the expectation was that the public health crisis shutdowns of the restaurant sector would be temporary. Although we may still be in a much longer temporary than was originally envisaged, it is becoming clearer that permanent restructuring may also have happened. Grocery stores have solidified their changed realities through an increased focus on multiple channel retailing rather than a complete choice between either bricks and mortar or online. Increased costs, resulting from the pandemic, are continuing to filter through the food system and we have a growing problem with food security for some Canadians given that employment in January 2021 was found to be at its lowest level since August 2020. Unemployment moves directly with lockdowns that are varied across the country.

Retailers’ coalition and quantity discounts under demand uncertainty

Coalition of retailers is a nowadays phenomenon in retailing channels (RCs) that makes it possible for the retailers to enhance their business performance and respond to the consumers' needs more effectively. This paper discusses the retailers' coalition advantages and challenges in a two-echelon retailing channel consist of one wholesaler and two non-competing retailers who serve the consumers. The model is developed under a classic newsvendor problem where an all-unit quantity discount is offered by the wholesaler. Our investigations are conducted for both homogeneous/heterogeneous retailers under three different scenarios. In the developed models, the retailers start to make a coalition and make a joint order in order to gain more from the offered discount by the wholesaler, and then using a heuristic procedure they allocate the received order to serve their individual markets. The main objective of this study is to analyze and resolve challenges of the retailers' coalition when a quantity discount is offered in order to make them capable to meet consumers' needs in the best possible manner. Three models are developed: (1) no-coalition decentralized scheme, (2) decentralized coalition where the retailers coalesce, and (3) centralized coalition where not only the retailers but the wholesaler participate in the coalition scheme. Our paper contributes to the RC management literature by analyzing the benefits of the retail coalition in taking most advantage from an offered quantity discount. Results demonstrate that the optimal configuration of the retailers' coalition increases profits of both the retailers and the RC in comparison with the no-coalition scenario. Our findings help procurement managers to rethink their ordering policy toward forming coalition to gain more profits and enhance their service level to meet consumers’ needs.

Optimal pricing and ordering digital goods under piracy using game theory

In this paper, we consider a supply chain with a single manufacturer and two competing retailers. The manufacturer sells his digital goods, which may be pirated, to customers through a traditional and a digital retail channel. It is assumed that the manufacturer takes a leader role and the retailers follow it. We investigate the contracts that the manufacturer offers to the retailers and our goal is to find the optimal pricing and ordering decisions made by retailers and the best contract that includes maximum profit for the supply chain. Also, we study a numerical example and examine the proposed contracts. On the other hand, in the sensitivity analysis section, we analyze the impact of each parameter of the problem, in particular, the impact of piracy on the profit of supply chain members and decision variables.

Characteristics of Local Food Consumers’ Use of Retail Channels

Characteristics of Local Food Consumers’ Use of Retail Channels

The optimal pricing and service strategies of a dual-channel retailer under free riding

<p style='text-indent:20px;'>Free riding refers to that in a multi-channel market, consumers enjoy the presale service of a product at one channel but purchase the product at another channel. In this paper, we study the optimal pricing and service strategies for a dual-channel retailer, who sells a product through both a traditional retail channel and an online channel. We assume that the offline channel provides the presale service but the online channel does not. We investigate how the changes of the degree of free riding affect the pricing/service strategies and profits of the two channels under three different scenarios: Stackelberg competition, Bertrand competition and channel integration. Our analysis shows that when the dual-channel retailer operates the two channels separately, no matter under which competitive scenario, free riding has a negative effect on both channels. And it is much more beneficial for the dual-channel retailer to let one channel work as a leader and another channel as a follower than to let the two channels make their decision simultaneous. In contrast, when the dual-channel retailer runs the two channels jointly, i.e., employs the channel-integration scenario, free riding may be beneficial to the retailer. Finally, this paper proposes and analyzes a revenue-sharing contract to coordinate a decentralized dual-channel retailer to achieve beneficial outcomes for both channels.</p>

Pricing policies in dual distribution channels: The reference effect of official prices

Official prices are commonly publicized by firms as reference prices to influence consumers’ valuation of products. By characterizing the reference effect as a general nondecreasing concave function of the official price, we study the timing of pricing decisions in dual distribution channels where a manufacturer distributes the product by a direct channel and an indirect retail channel. We investigate two fundamental pricing policies wherein the manufacturer and the retailer put forward their selling prices simultaneously (ST) or sequentially (SQ). Counter intuitively, our analytical results demonstrate that despite facing a more severe downstream price competition, the manufacturer should charge a higher (rather than a lower) official price in the ST setting than in the SQ setting. In addition, with the reference effect of official price, the ideal case for the manufacturers that operate dual distribution channels is to let the direct channel focus on promoting products and let the retail channel function be the major selling channel, an idea which is supported by the practices of Nike, Apple, and many other leading brands around the world. Furthermore, our numerical examples disclose that the dual-channel efficiency under both decentralized cases (i.e., ST and SQ) increases in the magnitude and variability of the reference effect and the retail channel cost, but decreases in the unit direct channel cost. Finally, we extend our model to incorporate an online direct channel and an offline retailer. We find that, under all of CE, ST and SQ scenarios, the shipping fee charged in the online direct channel will reduce the manufacturer’s total profits by lowering her optimal official prices and direct-sales quantities simultaneously. Managerial implications of this study are discussed.

Price and Service Competition in a Dual-Channel Supply Chain with Product Customization

This paper considers a dual-channel supply chain with product customization. One manufacturer and one retailer are involved. The online direct sales channel sells standard and customized products, and the offline retail channel sells standard products. The prices and service levels of products sold via different channels are differentiated, and the customization level which influences the customization cost and choices of customers is decided by the manufacturer. Three game models are proposed: the manufacturer Stackelberg (MS) model, the retailer Stackelberg (RS) model, and the Nash game model. The price and service decisions of the players are derived. Meanwhile, a service-cost-sharing contract is designed for the MS model. The impacts of price and service competition, service cost, and customers sensitivity to the customization level on the optimal decisions are investigated. Through the numerical analysis, we find that, among the three models, the manufacturer Stackelberg model is the most beneficial game structure for the overall supply chain but has the largest revenue gap between the two members. Second, under price competition and service competition, the manufacturer should differentiate the prices and services for direct sales standard products and customized products according to his market status. Third, the manufacturer should increase customization expenditures to construct his customization production line and provide more diversified products when consumers are more sensitive to product customization.

Unlocking the link between relationship duration and product De-listing in retail channels: The role of market orientation and brand diffusion

The literature on retailers' range rationalization is limited and focuses primarily on the consequences thereof from a consumer perspective. Drawing on the extant research on buyer-supplier relationships, brand management, and market orientation (MO) in business-to-business (B2B) markets, our research explores the antecedents of product de-listing in retail channels. It unlocks the link between relationship duration and product de-listing by examining the role of MO and brand diffusion. Using a combination of primary data with both objective and perceptual measures and proprietary objective data from a sample of suppliers to a large British supermarket, we find that the supplier's brand diffusion is an essential means of utilizing relationship duration between suppliers and retailers to reduce product de-listing in retail stores. Additionally, we find that MO plays opposite moderating roles in the links between relationship duration, brand diffusion, and product de-listing. It strengthens the negative influence of relationship duration on product de-listing, while it weakens the positive influence of relationship duration on brand diffusion. Our study contributes to research on marketing channels and B2B marketing by highlighting the limitations of relational view theory and unveiling the role of brand diffusion and MO in explaining the outcomes of buyer-supplier relationships in retail channels.

Microbial contamination and associated risk factors in retailed pork from key value chains in Northern Vietnam

Pork and pork products are important staple food in the diet of Vietnamese consumers. The safety of pork, including biological contamination, is a concern to several public authorities and value chain actors. This cross-sectional study aimed to identify Salmonella and total bacterial count (TBC) contamination of cut pork sold in different outlets, and determine the potential factors leading to contamination. A total of 671 pork samples were collected from different retail channels in three provinces in Northern Vietnam. Hygiene conditions and practices at pork vending premises were also observed and recorded. Data analysis used descriptive statistics and regression analysis. Overall, Salmonella prevalence in retailed pork was 58.1%. Salmonella contamination in pork from traditional retail, modern retail and food services were 60.5%, 50.9% and 80.5%, respectively. Eighty percent and 68% of fresh pork in canteen and street food was contaminated with Salmonella. Only a small proportion of a subset of the pork samples (6.2%) tested met the Vietnamese standard requirement for TBC contamination. Average concentration of TBC in fresh pork in traditional retail, modern retail and food services were 6.51 (SD: 0.64), 6.38 (0.65), and 6.96 (0.85) LogCFU/g, respectively. Transport time, use of the same tools for pork and other types of meat, storage temperature, and environment hygiene are important factors that might affect microbial contamination. The findings underline the high level of microbial contamination, which requires practical interventions to improve food safety hygiene practices and behavior of pork retailers.

Dual Channel Pricing of Large Fresh Chain Stores Considering Distribution Costs under Split Quotation

After large fresh food chain stores have opened online channels, distribution costs are a key factor affecting consumers' online buying behavior, which affects dual-channel pricing. This paper studies the dual-channel pricing strategy of large fresh food chain stores on the premise of dividing the quotation, considering the consumer's acceptance of online channels and the sensitivity to distribution costs. The research found that the optimal pricing of online channels is lower than that of retail channels. The optimal pricing of online channels is positively correlated with the acceptance of online channels, and negatively correlated with the sensitivity of consumer distribution costs. Moreover, after retailers have opened online channels, the market scale has expanded compared with traditional retail channels. Finally, numerical experiments are used to analyze the influence of various influencing factors on retailers' decision-making.

The Environmental Impact of Transport Activities for Online and In-Store Shopping: A Systematic Literature Review to Identify Relevant Factors for Quantitative Assessments

In the scientific literature, there are numerous studies with different approaches and focuses on assessing the environmental impact of online shopping and shopping in the traditional retail channel. The aim of this work is to analyse scientific studies that quantitatively assess the environmental impact of transport activities in both channels and to extract the factors used for this assessment. A literature search was conducted for the period 2006 to October 2020, with 90 studies shortlisted, of which 15 studies were identified as relevant in a screening process. The analysis showed that a different number of factors is included in the selected studies. Logistics-related and behavioural factors are mostly of similar importance. Third-order effects, such as rebound or complementary effects, are rarely considered. Furthermore, it becomes clear that the results also depend on differences in study design and external factors. This work illustrates the complexity of quantitatively assessing the environmental impact of online and in-store shopping. Caution is advised when deriving recommendations for action from general statements about the environmental friendliness of a distribution channel. The 15 factors found, together with the classification method used, form a solid basis for building new models.

Online platform service investment: A bane or a boon for supplier encroachment

This paper investigates a platform service supply chain composed of a single supplier and a service platform that not only resells products but also may serve as an intermediary that connects the supplier to consumers directly. The service platform can improve the performance of the retail channel by investing in retail service. The supplier decides whether to encroach on the retail market by opening a direct channel on the platform. We analyze the interaction between the platform's service investment strategy and the supplier's encroachment decision by establishing a game model. We then compare the payoffs of the firms under different service investment strategies and find that the platform benefits from supplier encroachment in several cases. The benefit not only comes from the reduction of the double marginal effect but also from the share of profits that the supplier earns from the direct channel. A spillover effect can be observed in the platform's service investment. The spillover effect causes the increased profits generated by such investment to transfer to the supplier, ultimately resulting in that the service investment by the platform does not necessarily create more revenue for itself, but increases the supplier's profit. Results indicate that a platform's investment in retail service is not always intended to prevent supplier encroachment. In some cases, such investment is meant to induce a supplier to encroach through the platform. Robustness analysis shows that the main results derived in the basic model hold. Managerial implications are then discussed and provided.

The evolution of retail channels in China since 2000

Drawing from premier marketing reports and retailing literatures about China, this article analyzes the evolution of retail channels in China from 2000 to 2015. Under the punctuated equilibrium paradigm, we examine the interactions between retailers and consumers by using competitive and transaction cost analysis. We find that China’s retail channel evolution since 2000 has been driven by unique factors: (a) the government’s economic reform policies and the introduction of Internet technology; (b) behavioral differences based on an urban-rural dualism; and (c) the deep penetration of mobile devices and social media platforms. Based on this analysis, the article concludes with predictions for the future development of retail channels in China.

Recycling channel selection and coordination in dual sales channel closed-loop supply chains

The implications of dual sales channels (direct and traditional retail channels) and closed-loop supply chains (CLSCs) have been well recognized in the literature and in practice. In this study, we explore the reverse channel choice for the manufacturer and the design of coordination mechanisms in CLSCs in the midst of dual competitive sales channels. We consider three recycling channel structures: manufacturer collecting (Model M), retailer collecting (Model R) and third-party collecting (Model C) structures. We present the following findings. The manufacturer and the retailer obtain more profits in Model M and Model R, respectively. However, from the perspective of the supply chain system, either the M model or the R model could be optimal depending on the following parameters: channel competition intensity between the direct and retail channels, collection costs and remanufacturing cost savings. Furthermore, we show that a simple price contract that consists of the wholesale price, direct channel price and transfer price of the used product (in Model R and Model C), with a complementary profit sharing mechanism can effectively coordinate dual-channel CLSCs under different recycling channel structures.

A guide to the seen costs and unseen benefits of e-commerce

As consumer shopping preferences shift from traditional retail channels toward e-commerce, the negative effects of e-commerce are easy to see and are often noted in the popular press. Yet, the benefits of this shift are often unseen. In this article, we first consider empirical evidence that suggests technological innovation is generally a net positive for society. We look at the unseen benefits along with each of the seen costs of e-commerce growth to fully understand the impacts on society. To do this, we consider packaging and waste, traffic and emissions, and energy and resource consumption—all considered costs of e-commerce. Based on this evidence, we propose that policymakers should exercise caution before developing policies that may alter this shift and limit innovation.

The dark side of bilateral encroachment within a supply chain

It is broadly agreed that the opportunity of encroachment is a viable strategy to increase profit. We consider a supply chain in which one manufacturer can encroach by selling national brand products to consumers directly, and one retailer can encroach by developing and selling store brand products. The national brand product is more valued by consumers, whereas the incumbent retailing channel is more cost-efficient. Linear inverse demand functions are derived from consumer utility functions. We assume that two firms move simultaneously and separately to choose their strategies. We then identify the conditions under which each firm should encroach. We find that the strategic channel control role of direct marketing is eliminated by the retailer’s opportunity of encroachment; hence, the manufacturer should not establish the direct channel unless direct sales actually occur. Contrary to conventional wisdom, the analytical results demonstrate that under certain conditions the opportunity of bilateral encroachment can form a prisoner’s dilemma between the manufacturer and the retailer, i.e. the Pareto optimal solution is not to encroach, but encroachment is the optimal strategy for both firms. In addition, we find that the prisoner’s dilemma could be avoided by allowing one firm to move first to choose its strategy.

Online Platform Service Investment: A Bane or a Boon for Supplier Encroachment

This paper investigates a platform service supply chain composed of a single supplier and a service platform that not only resells products but also may serve as an intermediary that connects the supplier to consumers directly. The service platform can improve the performance of the retail channel by investing in retail service. The supplier decides whether to encroach on the retail market by opening a direct channel on the platform. We analyze the interaction between the platform’s service investment strategy and the supplier’s encroachment decision by establishing a game model. We then compare the payoffs of the firms under different service investment strategies and find that the platform benefits from supplier encroachment in several cases. The benefit not only comes from the reduction of the double marginal effect but also from the share of profits that the supplier earns from the direct channel. A spillover effect can be observed in the platform’s service investment. The spillover effect causes the increased profits generated by such investment to transfer to the supplier, ultimately resulting in that the service investment by the platform does not necessarily create more revenue for itself, but increases the supplier’s profit. Results indicate that a platform’s investment in retail service is not always intended to prevent supplier encroachment. In some cases, such investment is meant to induce a supplier to encroach through the platform. Robustness analysis shows that the main results derived in the basic model hold. Managerial implications are then discussed and provided.