Retail Channel Research Articles

Demand Expansion and Cannibalization Effects from Retail Store Entry: A Structural Analysis of Multichannel Demand

In this paper, we investigate the demand response of a firm’s existing customers to retail store entry and which aspects of the response are demand-expanding and which cannibalize online sales. The empirical goal of the paper is to separately identify the effects of customer-to-store distance on purchase frequency, channel choice, and expenditure per purchase, using transaction-level data from a multichannel apparel brand. Our identification strategy exploits within-customer variation in distance resulting from store entry during a period of rapid retail expansion. We establish retail distance effects using descriptive regressions before developing a unified structural model that affords rich counterfactual analyses and further controls for product category preferences. We find material effects of decreasing retail store distance on purchase frequency and retail channel choice but not expenditures per purchase. Our structural model ascribes mechanisms to these effects in the form of increased brand consideration, higher retail utility from nonmonetary factors (e.g., reduced driving times), and infungibility of monetary transportation costs with budgets for apparel. Our estimates imply that a 10% reduction in retail store distance increases retail channel expenditures by 1.9% and decreases online channel expenditures by 1.2%, resulting in a 0.4% increase in total expenditures. Through counterfactual experiments, we demonstrate that retail expansion can ultimately limit the ability of the firm to price discriminate across channels because reducing transportation costs weakens the firm’s ability to enforce channel-based segmentation schemes. This paper was accepted by Matthew Shum, marketing. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.4308 .

Overall satisfaction formation across channels: an empirical study

PurposeNo other research analyzes the formation of overall satisfaction across channels, including the reciprocal interactions between store and website satisfaction and the factors that moderate them. Therefore, the aim of the present study is to examine how overall customer satisfaction is formed from the image and perceived congruence of the two main existing channels and the satisfaction induced by each.Design/methodology/approachThe online study covers 909 customers of a French mortar-to-click retailer specializing in women's and children's clothing. The conceptual model incorporates reciprocal interdependence between store satisfaction and website satisfaction. This model is tested using the procedure specific to non-recursive structural equation model.FindingsOverall satisfaction with the retailer is not only generated by satisfaction with the store and the website, but also directly and indirectly by the image of each channel. The contribution of the variables depends on the personal and situational characteristics of the customer. Not only is the relationship confirmed from store satisfaction to website satisfaction, but for the first time, in rarer cases the reverse is also observed. On the other hand, while the perceived congruence of channels can improve satisfaction with the channel for certain types of customers, in other cases the congruence can also worsen customers' overall satisfaction.Research limitations/implicationsThe detailed analysis of the formation of this satisfaction shows the pre-eminence of the customer over the retailer's initiatives. A retailer may facilitate or encourage virtuous interaction between retailer's channels by making the transfer of information and products more fluid (click and collect for example); but in the end, the customer is the one who decides whether or not to bring the channels closer together.Originality/valueContrary to what the literature assumes, in some cases, the retailer's attempt to integrate the channels may even reduce overall satisfaction if customers do not want this integration, just as a high level of satisfaction on the website can reduce in-store satisfaction.

Understanding influence of supply chain relationships in retail channels on risk management

Understanding influence of supply chain relationships in retail channels on risk management

Optimal collection delegation strategies in a retail-/dual-channel supply chain with trade-in programs

A continuous supply of used products ensures large-scale remanufacturing. Manufacturers can delegate used product collection to third-party collectors (3PCs) that provide a trade-old-for-cash (TOC) program, in addition to collecting used products through a trade-old-for-new (TON) program. However, few studies have investigated the interactions between collection delegation and channel structure in a supply chain. To fill this gap, we develop game-theoretic models in a supply chain under traditional retail channel and dual-channel structures to explore whether and when the manufacturer adopts the collection delegation policy and examine the optimal channel choice for trade-ins. Our finding shows that the manufacturer always benefits from collection delegation, but the retailer would be worse off from such delegation in certain cases. To be specific, under the retail channel structure, collection delegation has no impact on the retailer when the salvage value of used products is relatively low, whereas it hurts the retailer when the salvage value is relatively high. However, under the dual-channel structure, collection delegation never affects the retailer. Moreover, we find that the manufacturer's channel choice depends on the consumer acceptance of the direct channel and the salvage value of used products. We further consider the case that the manufacturer does not introduce the TON programs to explore the effects of TON and the case that the new and remanufactured products are sold at different retail prices to examine the equilibrium strategies. Our results can provide useful managerial insights for decisions-makers who face the choice of collection delegation under different channel structures.

Determinants of groundnut producers’ market channel choice in Western Oromia region, Ethiopia

Lack of adequate number of groundnut farmers' market channels remain long lasting problems in the study area. However, the choice of an appropriate market channel enables farmers to get reasonable profits from groundnut production. This study aimed to identify the existing groundnut market channels and to analyze determinants of channel choice decisions of smallholder groundnut producers in Western Oromia. A multi-stage sampling technique was used to select 400 sample household heads. Primary data were collected using a pre-tested semi-structured questionnaire and through key informant interviews using checklists. Multivariate probit (MVP) model was used to analyze determinants of groundnut market channel choices. The model resulted from that level of education, distance from the nearest market, access to market information, cooperative membership, trust in buyers, access to credit, the quantity of groundnut sold, own transport facilities, and access to off/non-farm income affected the probability of households in combination to select collector, wholesaler, retailer, and consumer market channels at different significance levels. The findings of the study suggest that there is a need for all concerned bodies like government to create market linkage between farmers and buyers, provide improved seed and other production inputs while farmers should maximize quantity of groundnut produced through accessing improved seed and other production inputs and market related development bodies should help in organizing farmers’ groundnut cooperatives. Similarly, strengthening micro financial institution to provide credit for groundnut producers is the area where interventions required.

Effects of green improvement and pricing policies in a double dual-channel competitive supply chain under decision-making power strategies

With the intensive growth of internet use, the customers choose the online market as the right preference. Hence, manufacturers are attracted to launch an online channel that includes a retail channel. To maintain the versatile demand types of products, a retailer is to stock more than one product of the same category, and consequently, he has to purchase products from different manufacturers. This article formulates a dual-channel supply chain model with two manufacturers and a standard retailer, where the optimal online prices, retail prices, wholesale prices, and level of green improvements are decided under different types of decision making power strategies such as Centralized, joint manufacturers Stackelberg, separate Stackelberg, Nash games are investigated. The optimal results are derived and compared with the help of a numerical example. Moreover, a sensitivity analysis is performed to scrutinize the effect of some important parameters. It is found that the green level is higher in a double dual-channel model than in a single dual-channel model. Moreover, the own-channel price sensitivity parameters affect the profit functions of the members negatively. The manufacturers must control the cost-coefficients of greening to increase the green level of the manufacturing products.

Cross Channel Integration Dalam Meningkatkan Retensi Pelanggan Pada Industri Ritel

In today's challenge, retailers are starting to use an omnichannel strategy that utilizes Cross-Channel Integration (CCI) to coordinate various retail channels and retain customers. CCI is designed to improve customer access and interaction with online and offline channels during the shopping process. This strategy is done to improve customer experience and increase Customers Retention (CR) which is the core goal of CCI. This research is a causal- comparative study to find out whether there is an influence between Cross Channel Integration on Customer Retention. The survey was conducted on 83 consumers who have used online and offline retail channels such as IKEA and Ace Hardware. By distributing questionnaires online, it was found that CCI had a positive effect on CR. This proves that the omnichannel retail strategy by utilizing CCI is one of the goals in increasing retail consumer retention in shopping

What drives retailer loyalty? A meta-analysis of the role of cognitive, affective, and social factors across five decades

Today's retailers face significant competition due to the proliferation of both retail formats and channels. It is crucial for retailers to understand how to develop a loyal customer base for competitive advantage. To this end, we conducted a meta-analysis of 1,908 effect sizes from 319 studies on retailer loyalty over the last 50 years, to examine the impact of cognitive, affective, and social retail experience on customer loyalty toward a retailer. Our analysis shows that affective experience became more important over time and had the highest impact on retailer loyalty, 24% more than that of social drivers and 50% more than cognitive drivers. Affective experience is particularly impactful online and for retailers of hedonic or low-involvement products. Social drivers increased significantly in impact over time too. Its effect was particularly strong on attitudinal loyalty, for studies with a higher proportion of females, and surprisingly, in utilitarian rather than hedonic retail contexts. Taken together, our findings suggest that traditional cognitive differentiators such as price and product assortment are no longer sufficient for maintaining customer loyalty to a retailer. Positive affective and/or social experience represent a more defensible path toward customer loyalty.

Supply chain coordination under credit risk with informational effort

This paper considers a decentralised supplier–retailer channel, in which providing trade credit to end-customers incurs credit risk. Informational effort can be made to mitigate credit risk but incurs a cost. The retailer makes the optimal credit period and informational effort decisions to maximise his/her profit, which leads to unaligned decisions. Based on the inventory model, this paper focuses on supply chain coordination when credit risk is uncertain and credit-period-dependent. Our results show that informational effort cost-sharing alone cannot achieve channel coordination and that it actually has an adverse effect on supply chain profits. A composite contract (coupling informational effort cost-sharing with credit risk cost-sharing) is proposed to coordinate the channel. In the contract, the profit sharing between both parties depends on the wholesale price (Pareto improvement) for fixed retail prices and purchasing costs. We also provide evidence that the credit period of suppliers is shorter than that of retailer when the supplier shares the retailer’s informational effort cost.

Online and offline retailing: What we know and directions for future research

The fast-paced growth of e-commerce is rapidly changing consumers’ shopping habits and shaping the future of the retail industry. While online retailing has allowed companies to overcome geographic barriers to selling and helped them achieve operational efficiencies, offline retailers have struggled to compete with online retailers, and many retailers have chosen to operate both online and offline. This paper presents a review of the literature on the interaction between e-commerce and offline retailing, highlighting empirical findings and generalizable insights, and discussing their managerial implications. Our review includes studies published in more than 50 different academic journals spanning various disciplines from the inception of the internet to present. We organize our paper around three main research questions. First, what is the relationship between online and offline retail channels including competition and complementarity between online and offline sellers as well as online and offline channels of an omnichannel retailer? Under this question we also try to understand the impact of e-commerce on market structure and what factors impact the intensity of competition /complementarity. Second, what is the impact of e-commerce on consumer behavior? We specifically investigate how e-commerce has impacted consumer search, its implications for price dispersion, and user generated content. Third, how has e-commerce impacted retailers’ key managerial decisions? The key research questions under this heading include: (i) What is the impact of big data on retailing? (ii) What is the impact of digitization on retailer outcomes? (iii) What is the impact of e-commerce on sales concentration? (iv) What is the impact of e-commerce and platforms on pricing? And (v) How should retailers manage product returns across online and offline channels? Under each section, we also develop detailed recommendations for future research which we hope will inspire continued interest in this domain.

Estimating Potential for Drug Budget Reallocation Following Expiration of Exclusivity of Pharmaceutical Products.

Background: The prioritization of public funds in an equitable and ethically sound manner along with efficient budget allocation are key challenges for governments and budget holders. Following the introduction of generics/biosimilars, the potential total budget made available for reallocation resulting from the loss of exclusivity (LOE) in a given market has not been estimated.Objectives: This study investigated the impact of generic/biosimilar entry on drug budget in 4 countries.Methods: Pharmaceutical sales data, drug costs and LOE dates were modeled and forecast using an analytical framework (Affordability by ReallocaTing Funds model [ART]) to estimate future incremental budget availability using scenario analyses in Greece (GR), the Netherlands (NL), Norway (NO) and Sweden (SW).Results: During 2020-2022, 166 (GR), 222 (NL), 145 (NO) and 93 (SW) products facing LOE were identified. This equated to release of an estimated cumulative budget during 2020-2024 of €218 million (GR), €1319 million (NL), €340 million (NO) and €876 million (SW). The estimated average budget released per year during 2020-2024 was 1.8% (GR), 4.6% (NL), 3.4% (NO) and 3.9% (SW) of each country’s total annual drug budget.Discussion: These analyses showed that LOE for pharmaceutical products between 2020 and 2022 can result in significant increase in budget availability. LOE in the retail channel was the main driver of budget availability in GR and SW, compared to LOE in the hospital channel in the NL and NO.Conclusion: Estimation of future release of budget capacity using the Affordability by ReallocaTing Funds model supports discussion on resource allocation to fund innovation and may help inform policy changes.

SafeCX: a framework for safe customer experience in omnichannel retailing

PurposeThe experience of safety as perceived by customers is a central issue in retailing, and its importance has increased because of the pandemic. Substantial literature exists addressing different factors related to safety/security experience in different types of retail channels. However, what is missing is a unified framework to guide safe customer experience initiatives across all channels. Therefore, this study aims to investigate the safety elements in omnichannel retailing as perceived by customers and how these safety elements affect customer experience (CX) judgments and consumer behavior in a post-pandemic context.Design/methodology/approachA systematic literature review on safety/security studies in a retail context is conducted, followed by a qualitative study driven by a means-end-chain laddering technique collecting data from 62 retail customers in Australia, the USA and UK.FindingsFourteen distinct safety elements in omnichannel retailing are identified. Four elements are relevant to the CX at the pre-purchase stage of the customer journey: social inclusiveness, role readiness, employment policy and safety policy enforcement. Six elements are relevant to the during-purchase stage: physical safety, personal hygiene, spatial distancing, fraud prevention, security surveillance and safety signal. The remaining four elements are relevant to the post-purchase stage: delivery safety, safety recall, mental health and data usage.Originality/valueThis study presents a new unified framework addressing safety and security in post-pandemic retail service settings. The SafeCX framework offers researchers and managers a holistic understanding of the distinct safety elements that shape customers’ perceptions across each customer journey stage of the retail CX.

SISTEM PEMASARAN JERUK SIAM GUNUANG OMEH DENGAN PENDEKATAN STRUCTURE, CONDUCT, PERFORMANCE (SCP) DI KABUPATEN LIMA PULUH KOTA

The Gunuang Ameh Siam orange (JESIGO) marketing system has complex problems, both in terms of price and non-price. The condition of the relatively high price of oranges (69.23%) compared to other types of oranges has resulted in uncompetitive orange market conditions. On the other hand, farmers as producers are not able to determine the selling price, the role of other marketing institutions is relatively more dominant. This study aims to analyze the marketing of JESIGO with a Structure, Conduct and Performance (SCP) approach. The research was carried out in Kenagarian Koto Tinggi during August 2019 to January 2020. The data used were primary and secondary data. Farmers were selected through purposive sampling (n=20) and snowball sampling for traders (n=11). The data were processed using qualitative and quantitative descriptive analysis. Based on the analysis of market structure, JESIGO marketing tends to lead to an oligopsony market structure. Judging from market behavior, there are 4 marketing channels and marketing functions performed by marketing institutions, namely the exchange function, physical function and facility function. Meanwhile, market performance analysis shows that the share of prices received by farmers (farmer's share) is quite high (>40%). The largest marketing margin is enjoyed by retailers in channel 3. The results of the analysis of the structure, behavior and market performance of the JESIGO orange illustrate that the market is in an efficient condition.

Information effects of warehouse automation on sales in omnichannel retailing

The recent development of an omnichannel business environment provides a seamless shopping experience throughout the customer journey. Although previous studies have identified the importance of rapid product delivery, consumers cannot evaluate delivery quality until it has arrived. This study argued that warehouse automation and retail channel brand characteristics lead to informative signals and to firms' higher sales in the omnichannel context. By analyzing panel data from the Japanese retail market, we tested the effects of warehouse automation and the moderating effects of omnichannel, online, and offline brand offerings on the effectiveness of the warehouse automation signal. Results showed that warehouse automation signaling positively affects firms’ sales and has a positive interaction effect with omnichannel offerings.

Choice and Influence of Return Policy and Remanufacture in a Dual‐Channel Supply Chain

To investigate the choice of return strategy and its impact on a dual‐channel supply chain, a game model is constructed to analyze the equilibrium outcomes of five scenarios: no returns allowed, refunds without returns, returns allowed but no return shipping insurance, returns allowed and return shipping insurance purchased by the manufacturer, and returns allowed and return shipping insurance purchased by the consumer. The study found that manufacturers offering refund policies generate more sales in the direct online channel, while retailers choose to reduce the retail price of their products. It is important to note that price reductions by retailers have a very limited effect and do not lead to an increase in sales in the retail channel. Manufacturers offering refund policies will inevitably infringe on retailers’ profits, and the variability of manufacturers’ profits depends on the residual value of returned products. Manufacturers should decide whether to offer a refund policy in online direct sales channels based on the residual value of the returned product; otherwise, the action would be detrimental to themselves. The price of direct online sales is the same whether the manufacturer buys the return shipping insurance or the consumer buys the return shipping insurance, but when the return shipping insurance is bought by the consumer, sales are higher in the direct online channel and lower in the retail channel. When the return shipping cost reimbursement received after purchasing return shipping insurance is low, it should be purchased by the manufacturer, and when the return shipping cost reimbursement received after purchasing return shipping insurance is high, it will be better for the consumer to purchase return shipping insurance.

Research on retail channel decisions considering consumer’s fairness concern

Online retailing provides alternative shopping channels, where the retail platform can either let manufacturers directly sell to consumers or open a self-operated channel, or even both. Regardless of sales channels, consumers often pay attention to the income gap between themselves and enterprises (namedconsumer’s fairness concern). In this work, we explore how consumers’ fairness concerns affect the optimal decisions of both manufacturer and retail platform under different retail channel modes (single-channel mode and mixed-channel mode). The results show that consumer’s fairness concern has a negative impact on the retail price under low production cost in single-channel mode, while the retail prices in mix-channel mode are jointly determined by consumer’s fairness concern and revenue sharing ratio. Besides, if the market channel mode has not yet formed, the retail platform can choose either a self-operated channel or manufacturer consignment channel, depending on the consumer’s fairness concern level and revenue sharing ratio. By contrast, if the market channel mode has already been formed, the retail platform should make effort to reduce consumer’s fairness concern if only the self-operated channel exists, while maintain consumer’s fairness concern and revenue sharing ratio at a moderate level if there exist mixed channels.

Research on Dual Channel Supply Chain Decision-making of New Retailing Enterprises Considering Service Behavior in the era of Big Data

Drawing from extant retailing and supply chain research, this paper studies the dual channel supply chain decision-making of member channel, and obtains the optimal price strategy, maximum demand and maximum total revenue of the supply chain of network channel and retailing channel under the centralized decision-making and decentralized decision-making respectively. The contributions of this study identify that investing in big data within a certain threshold can improve the channel service level, reduce the channel price and improve the income of the supply chain. Supply chain members improve the channel service level and increase the corresponding channel price. The supply chain can get the most advantages when manufacturers and retailers make centralized decisions. This paper provides a starting point for new retailing academic and practical research in a domain that is deficient in empirical research, provides the theoretical framework to new retailing enterprises and decision-making model for their sustainable competitive advantage.

Research on Dual Channel Supply Chain Decision-making of New Retailing Enterprises Considering Service Behavior in the era of Big Data

Drawing from extant retailing and supply chain research, this paper studies the dual channel supply chain decision-making of member channel, and obtains the optimal price strategy, maximum demand and maximum total revenue of the supply chain of network channel and retailing channel under the centralized decision-making and decentralized decision-making respectively. The contributions of this study identify that investing in big data within a certain threshold can improve the channel service level, reduce the channel price and improve the income of the supply chain. Supply chain members improve the channel service level and increase the corresponding channel price. The supply chain can get the most advantages when manufacturers and retailers make centralized decisions. This paper provides a starting point for new retailing academic and practical research in a domain that is deficient in empirical research, provides the theoretical framework to new retailing enterprises and decision-making model for their sustainable competitive advantage.

Research on Dual Channel Supply Chain Decision-making of New Retailing Enterprises Considering Service Behavior in the era of Big Data

Drawing from extant retailing and supply chain research, this paper studies the dual channel supply chain decision-making of member channel, and obtains the optimal price strategy, maximum demand and maximum total revenue of the supply chain of network channel and retailing channel under the centralized decision-making and decentralized decision-making respectively. The contributions of this study identify that investing in big data within a certain threshold can improve the channel service level, reduce the channel price and improve the income of the supply chain. Supply chain members improve the channel service level and increase the corresponding channel price. The supply chain can get the most advantages when manufacturers and retailers make centralized decisions. This paper provides a starting point for new retailing academic and practical research in a domain that is deficient in empirical research, provides the theoretical framework to new retailing enterprises and decision-making model for their sustainable competitive advantage.

Impact of quality decisions on information sharing with supplier encroachment

This study examines a retailer’s decision to share market demand information in a supply chain wherein a supplier sells a product with a certain level of quality to a retailer, who then resells it to the end consumer. It also considers whether a supplier should establish a direct selling channel by incurring a fixed entry cost to compete with the retail channel. Although conventional wisdom indicates that a retailer may voluntarily disclose information under ex-ante supplier encroachment, our results show how and why a retailer may share information with the supplier who encroaches on the retail market with a decision on quality. Specifically, our findings reveal that information sharing is beneficial to the retailer when the quality cost coefficient is low and entry cost is relatively low, even under encroachment by the supplier. Moreover, the retailer may prefer to disclose demand information to the supplier if the quality cost coefficient is low, even when the entry cost is high, under non-encroachment. Interestingly, we found that the supplier prefers to encroach if the retailer shares demand information when the entry cost is moderate. Further, we found that the retailer has a higher incentive to share information under supplier encroachment compared with non-encroachment. These results are in sharp contrast with the extant literature.