Retail Firms Research Articles

Pengaruh Manajemen Modal Kerja Terhadap Profitabilitas Perusahaan Ritel Indonesia: Peran Moderasi Makroekonomi

Working capital management has an important role on firm profitability especially for retail firms operating in emerging countries. Previous studies have not really considered the influence of macroeconomic conditions on working capital management and firm profitability relation. This paper investigates the impact of working capital management on firm profitability among Indonesian retail firms listed on Indonesia Stock Exchange with the moderation of GDP growth (GDP) and working capital loan interest rate (IR). This study uses panel data regression covering the period of Q1 2016 – Q2 2021. The results show that days inventory outstanding (DIO) has negative impact on gross operating profit (GOP) and return on asset (RoA) while days payable outstanding (DPO) has positive impact on RoA and cash cycle (CCC) has positive impact on gross operating profit (GOP). The results also show that GDP moderates the relationship between CCC components and GOP, while IR moderates the relationship between DIO and both firm profitability indicators, DPO and RoA, CCC and GOP. The results suggest retail firm management to pay attention to its inventories, payables and cash cycle. The management also has to consider the GDP growth and interest rate in managing its working capital. Keywords: macroeconomy, working capital management, profitability, data panel regression, retail

Impact of big data analytics on supply chain performance: an analysis of influencing factors

This paper aims to understand the impact of big data analytics on the retail supply chain. For doing so, we set our context to select the best big data practices amongst the available alternatives based on retail supply chain performance. We have applied TODIM (an acronym in Portuguese for Interactive Multi-criteria Decision Making) for the selection of the best big data analytics tools among the identified nine practices (data science, neural networks, enterprise resource planning, cloud computing, machine learning, data mining, RFID, Blockchain and IoT and Business intelligence) based on seven supply chain performance criteria (supplier integration, customer integration, cost, capacity utilization, flexibility, demand management, and time and value). One of the intriguing understandings from this paper is that most of the retail firms are in a dilemma between customer loyalty and cost while implementing the big data practices in their organization. This study analyses the dominance of the big data practices at the retail supply chain level. This helps the newly emerging retail firms in evaluating the best big data practice based on the importance and dominance of supply chain performance measures.

Food retail profits, competition, and the Great Recession

AbstractWe investigate the competitive effects of entry in the food retail sector in nonmetropolitan counties in the United States from 1998 to 2014. We pay particular attention to the period that covers the Great Recession, which disrupted market structure across a number of industries. Using a county‐level panel dataset, we use a seminal entry model to infer the local competitive effects of entry in the food retail sector. We estimate entry thresholds over time, which we then use to describe the rate of decline in profit margins following subsequent entry via entry threshold ratios. We find that food retail firms required a smaller market size to break even during the Great Recession, perhaps pointing to higher profits, as consumers shifted purchases to food‐at‐home. This effect is short‐lived for all but a single firm. The market threshold required to support a single food retail firm remains low throughout the post‐recession recovery period. We also find that the second firm may not decrease profit margins, but that competition increases meaningfully with the third and fourth entrants. The increased competition during the Great Recession also appears to have persisted into the recovery period. [EconLit Citations: L18; Q18].

The Impact of Absorption Capability, Innovation Capability, and Branding Capability on Firm Performance—An Empirical Study on Vietnamese Retail Firms

This study aims to explore the impact of absorption capability, innovation capability, and branding capability on the performance of retailers. Using the resource-based view (RBV), this study proposes a research model on the direct impact of absorption capability, innovation capability, and branding capability on firm performance as well as the indirect impact of absorption capability on firm performance which is mediated by both innovation capability and branding capability. By surveying 201 middle and senior managers representing 201 Vietnamese retailers, PLS-SEM was used to test the hypotheses. The research results show the important role of developing innovation capability and branding capability in improving retailer performance. The findings also reveal the significant impact of absorption capability on retailers by an indirect mechanism through innovation capability and branding capability. Based on the findings, practical implications for Vietnamese retailer managers are suggested to improve their performance by strengthening and developing absorption capability, innovation capability, and branding capability.

The Macroeconomic Effects of an Interest-Bearing CBDC: A DSGE Model

We develop a medium size dynamic stochastic general equilibrium (DSGE) model to assess the macroeconomic consequences of introducing an interest-bearing central bank digital currency (CBDC), an electronic alternative of payment with public use properties of cash and that can furnish as bank settlement balances. The model consists of seven sectors, namely households, retail firms, wholesale firms, capital producing firms, commercial banks, central bank, and government, and offers rich features. The use of cash and CBDC is differentiated with respect to their prices and transaction costs. In particular, we quantify the effects of negative shock on CBDC transaction cost to evaluate the potential of CBDC as an alternate instrument in liquidity holding in addition to cash and bank deposits. We also examine the effects of productivity shock and monetary policy shock on CBDC interest rate and CBDC demand, and their interaction with other main variables of the model.

Why do firms compete on price comparison websites? The impact on productivity, profits, and wages

ABSTRACT A substantial literature indicates that competition on price comparison websites is fierce, leading to lower prices for products sold. As such, we want to answer the key research question: Why do firms compete on price comparison websites? Based on theory, we suggest that participation in these marketplaces leads to increased productivity, i.e., output increases when holding constant the level of inputs used. This, in turn, leads to increased profits, motivating firms to enter price comparison websites despite fierce competition. To find out if theory holds, we empirically investigate how firm entry into a price comparison website affects firm productivity, profits, and wages. Empirically investigating the impact of PriceSpy market participation on productivity, profits, and wages is not easy since firms are free to select whether and when to enter or exit the PriceSpy marketplace, and we use a two-step procedure to address this problem. In the first step, we control for differences in observables between entering firms and potential control-group firms. Then, in a second step, we use a within-firm difference-in-difference estimator on the matched data to investigate how entry into the PriceSpy marketplace affects output while holding inputs constant. Our results indicate that for the full sample of firms, PriceSpy participation increases output by almost 12% when holding the level of inputs constant. Also, an investigation of who gains from the increased productivity shows that, for entering firms, operating profits increase by 9% and gross wages by 14% when studying the full sample of firms. That labor gains more from PriceSpy participation is even clearer when studying the impact on wholesale and retail firms separately. For those firms, wages increased by 16–17% after entry, while no statistically significant impact was found regarding operating profits.

COVID-19: Challenges and Avenues of the Banking System

COVID-19 has changed the entire scenario of the world in all aspects. The financial system is also a part that affected in the changed frame. Generally banking sector plays an inevitable role in the country’s economic development. Due to the announcement of lockdown, all non-essential public and private services, businesses, including retail and micro firms, schools and colleges, religious places across the world, stayed closing during this period and total regular transportation system stopped. The situation, which is caused due to pandemic, has affected the total monetary system very badly and showed its impact on the banking sector. In this period, lower income levels led to decreased production and increased unemployment conditions. The banks faced several challenges, such as increase in non-performing assets, reduced income, no funds in the form of deposits, etc. But at the same time, this situation opened doors to certain new avenues for improving the income earning capacity by using electronic mode and others. This paper is aimed at identifying the challenges faced and various new opportunities available in front of the banking field.

Product variety in retail: the moderating influence of demand variability

PurposeThe paper aims to empirically investigate how demand variability impacts product category inventory levels and stockout rates of retail firms. Additionally, the moderating effect of product variety on these performance metrics is explored.Design/methodology/approachUsing data from 78 individual retail stores of a single firm located in China, the authors develop a three stage least squares regression model to examine the simultaneous impact of product variety and demand variability on product inventory levels and stockout rates.FindingsThe results indicate that product variety and demand variability both negatively influence product category inventory levels and stockout rates. However, contrary to results for manufacturing or distributor environments, product variety dampens the negative relationship between demand variability and inventory.Practical implicationsFor products or categories with a high amount of demand variability, retailers can leverage more product variety to help improve their inventory performance. This is likely due to product substitution behaviors.Originality/valueThe authors show that previously examined relationships between product variety, demand variability, and firm performance are different in the retail environment than in the manufacturing or distributor context.

Exploring phygital omnichannel luxury retailing for immersive customer experience: The role of rapport and social engagement

Omnichannel retailing has revolutionized the way retailers create strategies for engaging customers in making purchase decisions. Phygital is a new-age transformative form of omnichannel retailing that emphasizes combining the physical and digital elements, with a particular focus on the human touch to satisfy social and symbolic consumer needs. Extant research has not fully addressed the role of phygital in luxury fashion retail. We explore the research question regarding how human interactions with experienced salespeople add value to the phygital experience. In doing so, we contribute to the luxury marketing literature by addressing the research gap by elucidating the role of phygital functionality in enhancing rapport building, social engagement, and developing trust and commitment, which results in a seamless customer experience, along with enhanced loyalty and patronage. Through 18 in-depth qualitative research interviews conducted with luxury retail managers and senior retail leaders, we provide guidelines to managers and practitioners at retail firms, to create actionable growth-oriented strategies focused on leveraging phygital capabilities.

Application of The Attribution Theory to Consumers’ Choice of Retail Outlets in A Nigerian Setting

This study examined the attributes influencing consumers’ choice of retail outlets in the fast moving consumer goods (FMCG) sector. Anchored on the Attribution Theory, the study investigated whether and to what extent five attributes (i.e. customer service, product quality, product assortment, competitive pricing, and store location) individually influence consumers’ choice of retail outlets. The major entity analyzed is actual buyers of FMCG in Awka Metropolis, Anambra State, Nigeria. Multiple regression analysis with the aid of SPSS Version 20 was used to test the hypotheses. The result from a convenience sample of 323 respondents indicates that all five proposed hypotheses were significant. That is to say, customer service, product quality, product assortment, competitive pricing, and store location significantly influence consumers’ choice of retail outlets. As a result, the study concludes that retailers may need to re-strategize in line with the findings of this study to delight customers and reap the concomitant benefits of profitability, growth, success and alluring retailer image. Finally, the study recommends that retail firms should adapt to the prevailing electronic payment options available in the economy to attract customers and ease operations.

Financial Performance and Working Capital Management Practices in the Retail Sector: Empirical Evidence from South Africa

This study examines the relationship between the financial performance and working capital management practices of South African retail firms listed on the Johannesburg Stock Exchange. The study sample comprised a panel of 16 South African retail firms for the period 2010–2019. A fixed-effects estimator was employed in the analysis. The working capital management was proxied by average age of inventory (AAI), average collection period (ACP), average payment period (APP), and cash conversion cycle (CCC), while the financial performance was proxied by net operating profit margin (NOPM), return on assets (ROA), and return on equity (ROE). The key findings of the study documented the following: (1) There is a negative relationship between average collection period and financial performance. (2) A negative relationship between average age of inventory and financial performance measures (NOPM and ROA) was found. (3) The average payment period was found to be negatively related to return on equity. (4) The cash conversion cycle and net operating profit margin variables were found to be negatively related. The study concludes that working capital management practices influenced the financial performance of the South African retail firms. It is recommended that South African retail firms observe prudent optimal working capital management practices, as these influence their financial performance.

Analysis of Factors Influencing Implementation of Competitive Strategies among Electronic Retail Firms in Nairobi CBD, Nairobi County, Kenya

This study sought to analyze factors influencing implementation of competitive strategies among electronic retail firms in Nairobi County. The study used descriptive research design. Records from the Ministry of Industrialization and Enterprise Development shows that there 3445 registered electronic retail enterprises that informed the target population of the study. From the target population of 3445 the researcher used stratified random sampling to get a sample size of 346. Primary data was gathered via a questionnaire. Statistical Package for Social Sciences (Version 26) was used to examine quantitative data. Descriptive statistics of frequency, percentage were calculated. The results from the regression showed that organization culture had the highest effect on implementation of competitive strategies with a coefficient of 0.133, followed by resource allocation, organization environment with a coefficient of 0.347, strategic communication with a coefficient of 0.150, organization environment with a coefficient of 0.167 and resource allocation with a coefficient of 0.296. The study recommends that an organization need to ensure that when implementing competitive strategies, they need to consider all the variables of the study as they had influences on the execution of competitive strategies.

Service innovativeness in retailing: Increasing the relative attractiveness during the COVID-19 pandemic

COVID-19 primarily spreads through close contact between humans and has affected retailing industries extremely hard. To manage the situation retailers have turned to service innovation to change their operations to make consumers feel safe while shopping. This research focuses on the role of service innovativeness in retailing firms during the COVID-19 pandemic through an empirical study of almost 6000 consumers of 28 retailing firms. The results suggested that retailers with high service innovativeness performed COVID-19 imposed innovations better to improve their relative attractiveness. For retailers with physical stores, changes to the servicescape and the offering were found to be the key antecedents of service innovativeness. The findings on COVID-19 imposed service innovations demonstrate the importance of service innovativeness in successfully changing retailing services to adjust to the restrictions from governments and safety needs of customers.

Supply chain finance in enhancing supply-oriented and demand-oriented performance capabilities – moderating role of perceived partner opportunism

PurposeWhile supply chain scholars concur on the need to integrate supply chain finance (SCF) processes to meet ever-changing customer demands, it is unclear how SCF influences business performance in the presence of perceived opportunistic behavior. Therefore, the study aims to investigate the moderating role of perceived partner opportunism in the supply chain.Design/methodology/approachDrawing on the dynamic capability theory (DCT), this study investigates how perceived supply chain partner opportunism moderates the mediating role of supply- and demand-oriented performances on the link between SCF and business performance, from the retail industry perspective. Data was collected from Australian retailing firms. In all, 293 completed surveys were received. Moderated mediation analysis was conducted.FindingsThe results of this study indicate that supply- and demand-oriented performances serially mediate the relationship between SCF and business performance. The study also found that the effect of SCF on performance was higher when perceived partner opportunism was lower.Practical implicationsTo respond to changes in consumer preferences and demand effectively, supply chain and marketing managers need to understand the complex interaction between supply- and demand-oriented performances and the key role of SCF in developing such capabilities.Originality/valueThe current study theorizes and demonstrates the effects of supply- and demand-oriented performances that can facilitate the effects of SCF on business performance. Also, the study reveals the effect of each dimension of SCF (accounts payable, accounts receivable and inventory finance) on supply- and demand-oriented performances. Additionally, the study shows the key role of perceived partner opportunism in supply chain management.

Cost behavior in e-commerce firms

We conduct empirical research on the flexibility of operating costs of e-commerce firms. With an international sample of firms from different European countries, we find that e-commerce firms have a different cost structure than traditional retail firms, with a lower share of labor costs and cost of goods sold, but a higher share of other operating costs. While we find no significant different behavior in cost of goods sold and labor costs between the two types of firms, e-commerce firms are more flexible in adjusting other operating costs than traditional retail firms when activity decreases. Results are robust to different models, estimations methods and samples. The higher flexibility of e-commerce firms relies on other operating costs, but e-commerce creates qualified jobs with higher wages than traditional retail, with no additional exposure to labor uncertainty for employees.

Prolonging retailer-supplier relationship: a study of retail firms during COVID-19 pandemic

The world is beholding new drifts in retail buying, health services, social factors during the current pandemic. Retailers and suppliers are challenged to take the risk and prepare themselves to implement strategic actions according to the dynamic environment. This study has made an effort to identify the key determinants of the retailer-supplier relationship to be focused on surviving amidst COVID-19 pandemic. This study aims to identify the key determinants of retailer-supplier relationship and assessing retail firms' supply chains appropriate as per key determinant to be intensive in a pandemic situation. The work reveals collaboration efficiency and co-creation are the prominent determinants for dealing the retailer-supplier association. The study shows that order fulfilment is the most suitable RSCs for creating co-creation and capabilities in managing humanitarian logistics to survive in the COVID-19 pandemics.

Amplifying organizational performance from business intelligence: Business analytics implementation in the retail industry

PURPOSE: The concept of business analytics (BA) and business intelligence (BI) is just emerging in the Philippines. Since these are new concepts, it is important to investigate their impact on organizational performance and the performance metrics in business industry. The aim of this study is to examine the impact of business analytics generating business intelligence and how it affects organizational performance by developing a structural model. Consequently, the impact of organizational performance on other performance metrics was also established. METHODOLOGY: The partial least squares – structural equation modeling was utilized, which proposed a model that shows how business intelligence, generated by business BA, affects organizational performance, which consequently leads to improved marketing, financial, and business process performance. A survey was conducted on business analysts and executive managers of retail companies that have already been implementing BA for at least three years. FINDINGS: BA capabilities have a significant positive effect on the level of BI. BI has a significant positive effect on organizational performance. However, the result of the moderation analysis indicated that the level of readiness for BA implementation could not be considered a moderating factor on the relationship between BI and organizational performance. IMPLICATIONS: Out of the different BA capabilities, the decision support system and business process management were found to be the most beneficial functions in generating BI. BI amplifies organizational performance and consequently improves the marketing and business process performance of retail firms. However, the readiness for BA implementation does not significantly affect how BI improves organizational performance. Overall, it is recommended that in order to enhance marketing and business process performance, retail firms should focus on the BA capabilities of decision support system and business process management. ORIGINALITY AND VALUE: This would be the first empirical study in the Philippines which has assessed how business analytics and business intelligence impact organizational performance. This study is original in determining what BA capabilities generate BI, which translates to improved organizational performance. This study is also unique in defining what key performance metrics are much improved as a result of its implementation. This may serve as a viable reference for other researchers interested in business analytics and other technology about data management applied in business operations.

Investigating a green supply chain with product recycling under retailer's fairness behavior

<p style='text-indent:20px;'>Due to the rapid increment of environmental pollution and advancement of society, recently many manufacturing firms have started greening their products and focusing on product remanufacturing. The retailing firms are also taking several efforts for marketing those products and thinking more about the fairness of the business. Keeping this in mind, this study investigates the effect of recycling activity and the retailer's fairness behavior on pricing, green improvement, and marketing effort in a closed-loop green supply chain. In the forward channel, the manufacturer sells the green product through the retailer while in the reverse channel, either the manufacturer or the retailer or an independent third-party collects used products. The centralized model and six decentralized models are developed depending on the retailer's fairness behavior and/or product recycling. The optimal results are derived and compared analytically. The analytical results are verified by exemplifying a numerical example. A restitution-based wholesale price contract is developed to resolve the channel conflicts and coordinate the supply chain. Our results reveal that (ⅰ) the manufacturer never selects the third-party as a collector of used products under fair-neutral retailer, (ⅱ) the fairness behavior of the retailer improves her profitability but it diminishes the manufacturer's profit, and (ⅲ) if the manufacturer does not pay much transfer price, then the collection through the third-party is preferable to the fair-minded retailer.</p>

Socially responsible donation decision analysis in a supply chain under government subsidy

As an important form for firms to demonstrate social responsibility, socially responsible donation (SRD) is becoming increasingly widespread and attracting more attention. It is important to encourage firms to effectively undertake social responsibilities and improve social welfare. Recently, it has become very popular for firms to demonstrate their social responsibility through SRD campaigns. With the aim of solving the decision-making problem of a retailer-led socially responsible supply chain considering government subsidy, this study established a three-stage Stackelberg game model. By analyzing the impact of pricing and donation decisions on operations and management, either with or without government subsidy, we found that to achieve better performance, retail firms will choose to implement donation activities. However, it is not the case that the higher the donation, the better the performance. In addition, there is a gap: without government subsidy, social welfare is not optimal when members’ performance in the supply chain is maximized, and more donations are needed to maximize social welfare. This study proves that government subsidy can encourage supply chain members to generate more donations, while improving the performance of the supply chain and social welfare. We propose an optimal subsidy rate to eliminate the gap and maximize social welfare. We also analyze the impact of external parameters, including the cost parameter and consumer preference level, on the equilibrium results. Finally, we extend this research to provide management insights for businesses under uncertain market sizes and centralized decision-making scenarios.

Retail Website Interactivity and Firm Performance

Interactivity is an important feature of retail websites. Some research suggests that interactivity can be increased by implementing additional features while other studies point to the fact that “objective” interactivity - as measured by the mere number of features - is quite different from perceived interactivity (PI). Interestingly, while there seems to be initial evidence about the consequences of PI, a comprehensive assessment of attitudinal and behavioral outcomes of PI as well as the impact of PI on (objective) website and firm performance using field data has not been offered. Our study attempts to fill that void. Based on objective performance data of the top 500 retail websites over two years as well as ratings on 35 interactivity features, we find the majority of objective interactivity indicators to be unrelated to PI. Perceived responsiveness and perceived control relate positively to retailers’ sales differences. Perceived communication and objective responsiveness show negative indirect effects on sales, giving rise to the assumption that unobserved heterogeneity of the retailers’ websites might explain these counterintuitive findings.