Store Price Research Articles

A Practical Price Optimization Approach for Omnichannel Retailing

Consumers are increasingly navigating across sales channels to maximize the value of their purchase. The existing retail practices of pricing channels either independently or matching competitor prices are unable to achieve the desired profitable coordination between channels. We engaged with three major retailers over two years and developed omnichannel pricing (OCP) solutions in partnership with IBM Commerce to overcome these challenges. We implement an integrated data processing and machine learning framework that enables estimation of location-specific, cross-channel price elasticities and competitive effects. We develop an integrated OCP optimization formulation to profitably coordinate prices for nonperishable products offered across channels and store locations while satisfying practical constraints on volume and price. The resultant optimization formulations for discrete choice demand models are nonconvex and NP-hard, and we prescribe practically efficient mixed-integer programs that can be used to recover (near) optimal solutions. An OCP implementation in two categories for a major retail chain projected a 7% profit lift while preserving the sales volume. This benefit was achieved by lowering online prices and optimally raising and lowering location-specific store prices. This integrated pricing approach allows the retailer to be competitive and preserve market share without aggressively matching the low price of e-tail giants.

The Influence of the Russian Embargo on the Economic Situation of Apple Producers in the Eastern Part of the Masovia Province

The article concerns the effects of the Russian embargo on apple producers in Poland. Scientific literature is quite poor in this field, mainly information articles in industry literature and media information are available. The literature was reviewed in this respect and two studies (questionnaire and interview) were carried out. The information obtained allowed us to draw conclusions about the very large negative impact of the embargo on the apple market and to learn about its characteristics. New markets do not generate sufficient demand, in 2018 apple prices dropped below production costs, but this does not reflect in a drop in prices in stores, which means that price speculations take place, and the situation is used by realtors. It is necessary to quickly return to the Russian market, because soon it will be unrecoverable for Polish fruit farmers. It is also necessary to put pressure on the European Union's policy, because nowadays it is the Polish farmers who bear its effects to the greatest extent.

Dynamic Pricing of Omnichannel Inventories

Omnichannel retail refers to a seamless integration of an e-commerce channel and a network of brick-and-mortar stores. An example is cross-channel fulfillment, which allows a store to fulfill online orders in any location. Another is price transparency, which allows customers to compare the online price with store prices. This paper studies a new and widespread problem resulting from omnichannel retail: price optimization in the presence of cross-channel interactions in demand and supply, where cross-channel fulfillment is exogenous. We propose two pricing policies that are based on the idea of “partitions” to the store inventory that approximate how this shared resource will be utilized. These policies are practical because they rely on solving computationally tractable mixed integer programs that can accept various business and pricing rules. In extensive simulation experiments, they achieve a small optimality gap relative to theoretical upper bounds on the optimal expected profit. The good observed performance of our pricing policies results from managing substitutive channel demands in accordance with partitions that rebalance inventory in the network. A proprietary implementation of the analytics is commercially available as part of the IBM Commerce markdown price solution. The system results in an estimated 13.7% increase in clearance-period revenue based on causal model analysis of the data from a pilot implementation for clearance pricing at a large U.S. retailer. The e-companion is available at https://doi.org/10.1287/msom.2018.0737 .

A critical audit on available beef and chicken edible offals and their prices in retail chain stores around Gaborone, Botswana

The study aims to determine the available beef and chicken edible offals and their prices in four major retail stores in Gaborone, Botswana. Traditionally, edible beef and chicken offal were available and sold in rural meat and informal markets around Gaborone, but recently upmarket retail stores of Gaborone sell these products. The study was done over a period of twelve months. Amongst the offals noted in the retail stores were ox tail, tongue, spleen, ox heel, kidneys, intestines, rumen, omasum, liver and ox heart for beef and feet, liver, gizzards, intestines, necks and kidneys for chicken. Offals were cheaper than the cheapest standard beef and chicken cuts being the chuck/brisket or stewing beef for beef and breast for chicken. Green beef offals were generally cheaper than red offals. The most expensive beef offal was ox tail at ~P60.00, and the cheapest offal was ox heel at ~P19.95 (USD1.00 ~ BWP11.00). For chicken, the gizzards were the most expensive at ~P49.45, with the necks being the cheapest at ~P26.59. Improved marketing and utilization of offals will reduce meat wastage. Meat processors will consequently generate more income, and assist with food security and nutrition at household level. Key words: Beef, chicken, edible offal products, pricing, retail chain stores.

Testing the Price of Healthy and Current Diets in Remote Aboriginal Communities to Improve Food Security: Development of the Aboriginal and Torres Strait Islander Healthy Diets ASAP (Australian Standardised Affordability and Pricing) Methods.

Aboriginal and Torres Strait Islander peoples suffer higher rates of food insecurity and diet-related disease than other Australians. However, assessment of food insecurity in specific population groups is sub-optimal, as in many developed countries. This study tailors the Healthy Diets ASAP (Australian Standardised Affordability and Pricing) methods protocol to be more relevant to Indigenous groups in assessing one important component of food security. The resultant Aboriginal and Torres Strait Islander Healthy Diets ASAP methods were used to assess the price, price differential, and affordability of healthy (recommended) and current (unhealthy) diets in five remote Aboriginal communities. The results show that the tailored approach is more sensitive than the original protocol in revealing the high degree of food insecurity in these communities, where the current diet costs nearly 50% of disposable household income compared to the international benchmark of 30%. Sixty-two percent of the current food budget appears to be spent on discretionary foods and drinks. Aided by community store pricing policies, healthy (recommended) diets are around 20% more affordable than current diets in these communities, but at 38.7% of disposable household income still unaffordable for most households. Further studies in urban communities, and on other socioeconomic, political and commercial determinants of food security in Aboriginal and Torres Strait Islander communities appear warranted. The development of the tailored method provides an example of how national tools can be adapted to better inform policy actions to improve food security and help reduce rates of diet-related chronic disease more equitably in developed countries.

Understanding determinants of illegal e-book downloading behaviour in the UK and Germany

With the success of e-books in the last decade, e-book piracy has become increasingly prevalent. This is a significant threat to the publishing industry, publishers and authors alike. Despite efforts to inhibit illegal downloading of e-book files, unauthorized download platforms have not lost much popularity. One of the underlying problems is a limited understanding of the determinants that drive consumers in their choice between legal and illegal download options. This article identifies and critically evaluates the key product attributes in the decision-making process of consumers downloading e-books from legal and illegal sources. By providing consumer insights, the publishing industry and e-book sellers can be guided to meet consumer demand better and design marketing plans to attract consumers towards legal download sources and discourage e-book piracy. The consumer choice between legal and illegal e-book download platforms is analysed using the multi-attribute theory for consumer decision making. 23 attributes were tested using an online questionnaire and analysed by logistic regression. Three attributes were found to be significant in determining the choice of download platforms: A low perception of the importance of copyright compliance, dissatisfaction with the security of download platforms and dissatisfaction with e-book prices in online stores.

Contribution of terroir store brands to retailers’ legitimacy and CSR and price images

This research shows that consumers’ attitude toward terroir store brands has a positive and significant influence on the store price image and on the retailer’s Corporate Social Responsibility (CSR) image, regardless of the store format considered (hypermarket, supermarket, and convenience). It thus affirms that the terroir store brand, with a price–quality ratio considered satisfactory by consumers, contributes to the development of a positive price image and a favorable CSR image. This research also indicates that consumers’ attitude toward terroir store brands has a direct positive and significant influence, or indirect influence through its CSR image, on two dimensions of territorial legitimacy (territorial impregnation and territorial rooting). Terroir store brands are thus shown to be a factor in retailer legitimization.

Does price sensitivity and price level influence store price image and repurchase intention in retail markets?

In today's competitive price environment, customers are more sensitive to store price image as a driver of the decision of where to buy. This paper addresses the impact of store price image on repurchase intentions in the context of retail markets in the south of Brazil. The moderating effects of price sensitivity and price level are also analyzed. A comprehensive model reports determinants of repurchase intentions. A descriptive quantitative research study is undertaken, based on an applied survey. Partial least squares–structural equation modeling (PLS–SEM) is used, supported by Smart-PLS 3.2.7. The model sample includes 207 customers, university students who had experienced retail purchases in different formats of supermarkets. The data analysis yields surprising findings. Results show that store price image positively impacted on customer repurchase intentions, with low and high price levels moderating these effects. Price sensitivity also presented moderating effects as another important variable acting on the relation between store price image and repurchase intentions for both low and high price sensitivity customers. The implications of these findings are discussed with suggestions for future research.

Factors Influencing Consumer Purchase Decisions at Organized Retail Stores in Ludhiana

Indian Retail Market is going through a transition phase. With retail environment getting modernized and customers gradually shifting from the culture of shopping at small neighborhood kirana stores to large hypermarkets. With more and more fancy shopping option in hand in form of growing number of malls and supermarkets and with more number of international counterparts entering the sector, consumer is being spoilt for choice. The share of organized retail in total retail sector in India is growing at a remarkable rate. Many domestic as well as international players have already penetrated in this market. Competition is at its high pace. Great focus is on the consumer preference over the attributes of retail stores that are considered important. It is assumed that such factors play a significant role in converting footfalls into actual sales. The aim of the study is to identify the factors affecting consumer behavior and preference related to shopping at organized retail stores. In this paper, analysis of the consumer’s preference of the specific attributes of selected 5 major retail brands of Ludhiana is done. Retail stores selected were Big Bazaar, Lifestyle, Westside, Vishal Mega Mart and Globus. Factor analysis has been used in identifying the main factors. The factors include sales assistance, store ambience, store attractiveness, store pricing policy, store promotion and store Convenience.

Heuristic Thinking in the Market for Online Subscriptions

I study “left-digit bias” (LDB) in which consumers perceive products as discretely more expensive when the left-hand digit of the price increases, for example when comparing products priced at $5.99 vs. $6.00, $19 vs. $20, or $195 vs. $200. Recent work has established the presence of LDB in large-scale, real-world market settings including used car odometer readings (Lacetera et. al 2012) and grocery store prices under $10 (Shlain 2018). I leverage new data covering online subscription sales at more than 100,000 firms over six years to document similar patterns in all digits of prices (dollars, tens of dollars, hundreds of dollars) for subscriptions priced up to $1,000. Using panel data methods to reduce selection bias suggests potential revenue gains of several percentage points from optimal repricing, consistent with Shlain (2018). I discuss implications of potential large-scale pricing assistance for the online economy.

Match Your Own Price? Self-Matching as a Retailer’s Multichannel Pricing Strategy

Multichannel retailing has created several new strategic choices for retailers. With respect to pricing, an important decision is whether to offer a “self-matching policy,” which allows a multichannel retailer to offer the lowest of its online and store prices to consumers. In practice, we observe considerable heterogeneity in self-matching policies: There are retailers who offer to self-match and retailers who explicitly state that they will not match prices across channels. Using a game-theoretic model, we investigate the strategic forces behind the adoption (or non-adoption) of self-matching across a range of competitive scenarios, including a monopolist, two competing multichannel retailers, as well as a mixed duopoly. Though self-matching can negatively impact a retailer when consumers pay the lower price, we uncover two novel mechanisms that can make self-matching profitable in a duopoly setting. Specifically, self-matching can dampen competition online and enable price discrimination in-store. Its effectiveness in these respects depends on the decision-making stage of consumers and the heterogeneity of their preference for the online versus store channels. Surprisingly, self-matching strategies can also be profitable when consumers use “smart” devices to discover online prices in stores. Our findings provide insights for managers on how and when self-matching can be an effective pricing strategy. The online appendix is available at https://doi.org/10.1287/mksc.2017.1035 .

Blenderized feeding formulas with nutritious and inexpensive foods

ABSTRACT Objective: To propose an inexpensive blenderized tube feeding formula consisting of foods with standard nutritional composition that meets the nutritional requirements of individuals aged more than 51 years. Methods: The enteral diets were formulated mainly with fresh foods and tested for their physical (homogeneity, stability, osmolality, pH, and flow rate) and chemical (moisture, ash, protein, lipids, energy, crude fiber, vitamin C, calcium, iron, magnesium, and zinc) characteristics. The cost was determined by surveying item prices in supermarkets and stores that specialize in nutritional support. Results: The blenderized tube feeding formula was stable and homogeneous, and had slightly acidic pH, hypertonic osmolality (603mOsm/kg), and flow rate comparable with gravity drip (21 minutes). Proximate composition analysis indicated appropriate levels of proteins, lipids, vitamin C, and zinc. The mean cost of 2000kcal of the standard blenderized tube feeding formula was R$ 12.3±1.4, which is 70% cheaper than the mean cost of similar commercial enteral formulas. Conclusion: The planned diet can be an excellent choice for patients using blenderized tube feeding formulas as it consisted of habitual food items, had physical and nutritional quality, and was inexpensive.

Does unit pricing influence store price image dimensions and shopping intentions for retail stores?

PurposeWhile previous literature focusses on the impact of unit pricing on the customer level by analysing customer awareness and product choice, the present research aims to highlight the impact unit pricing has at the store level.Design/methodology/approachThe impact of unit pricing on the store price image is investigated in two experiments. While the first experiment assesses the general influence of unit price presence and unit price prominence on store price image, the second experiment provides further insights into the influence of unit price prominence on store price image and shopping intentions under consideration of moderating variables.FindingsThis research demonstrates that the availability of unit prices influences several store price image dimensions positively, namely, price processibility, price perceptibility and evaluation certainty. There is also an indirect positive effect on value-for-money perception. Furthermore, unit price prominence has a positive effect on the dimension price processibility. There is a positive influence of unit price presence and unit price prominence on the consumers’ intention to shop at a given store through the store price image.Originality/valueThis paper adds to the existing unit price and store price image literature and derives implications for retailers as well as for policymakers regarding the presentation of unit prices on price labels. Policymakers can use the results for motivating retailers to use unit price information more actively and present it more prominently beyond the minimum regulatory standards.

Does opening a supermarket in a food desert change the food environment?

Improving access to healthy foods in low-income neighborhoods is a national priority. Our study evaluated the impact of opening a supermarket in a ‘food desert’ on healthy food access, availability and prices in the local food environment. We conducted 30 comprehensive in-store audits collecting information on healthy and unhealthy food availability, food prices and store environment, as well as 746 household surveys in two low-income neighborhoods before and after one of the two neighborhoods received a new supermarket. We found positive and negative changes in food availability, and an even greater influence on food prices in neighborhood stores. The supermarket opening in a ‘food desert’ caused little improvement in net availability of healthy foods, challenging the underpinnings of policies such as the Healthy Food Financing Initiative.

Geo-Blocking of Non Audio-Visual Digital Media Content in the EU Digital Single Market

This study measures the extent of cross-border geo-blocking and the impact on product availability and pricing for three non-audio-visual digital media products (music, e-books and games) in the EU Digital Single Market. We find that cross-border access to online media stores is generally blocked for the products and distributors surveyed in this study, though it can usually be circumvented. By contrast, cross-border availability is high, reaching around 98.6% for e-books on Amazon, 90% for downloadable music on iTunes, and 81.1% and 90.5% respectively for PS3 and PS4 PlayStation games. We could not directly verify cross-border availability of music in streaming services but a small sample test suggests that it could reach around 96% on Spotify. We find that the frequency of cross-country price differentiation is limited for games in the Sony PlayStation stores (less than 4%) but higher for downloadable music in the Apple iTunes stores (11.5%) and Amazon e-book stores (26%). Much of this price differentiation is driven by exchange rates and rounding off prices in country stores not denominated in Euro. In music, price discrimination is used mostly to extract higher prices from high-income consumers and for more popular songs with a lower price elasticity of demand. Subscription prices for main music streaming services are strongly correlated with country per capita income levels. Geographical market differentiation and geo-blocking in digital media is often attributed to the territoriality of the copyright management regime. In most cases rights holders are in a position to issue multi-territorial licenses. For commercial reasons however they may prefer to exercise their rights on a territorial basis. The welfare effect of geo-blocking on sellers can be safely assumed to be positive otherwise sellers would not apply this commercial strategy. The impact on consumer welfare is a-priori ambiguous. Geo-blocking reduces the extent of product variety available to consumers. Whether it increases or reduces consumer welfare is an empirical question. The data required to empirically estimate the impact of (lifting) geo-blocking restrictions on welfare are held by the private platform operators. A future assessment can only be made if the required data on product prices and sales are made available to independent researchers. Lifting geo-blocking restrictions will induce price arbitrage between country markets. That may put pressure on sellers to reduce price differentiation and push some prices up, others down. The price response of sellers is hard to predict and may have repercussions not only on downstream consumers but also on upstream parts of the supply chain. Price convergence is unlikely to be perfect and some differentiation may continue to exist because trade costs between country stores may not fall to zero (exchange rates, means of payment, linguistic trade barriers, etc.).

Store Price Image – the Power of Perception

The purpose of the article is to indicate the complexity of the store price image – its variously identified dimensions and dynamic character. This topic is extremely important for the effectiveness of brand store management and brand store competitiveness. The fact that the store price image is based on perception rather than reality does not facilitate the process of creating desirable store price image. In the article the results of a literature review are presented, and the final part of the paper contains some practical conclusions. Focusing on this topic is due to the significant changes in the store formats in Polish retailing. Purpose – The purpose of the article is to indicate the complexity of the store price image – its variously identified dimensions and dynamic character. This topic is extremely important for the effectiveness of brand store management. Design/Methodology/Approach – Literature review. Findings – The fact that the store price image is based on perception rather than reality, does not facilitate the process of creating desirable price store image – on the contrary. Proper and effective management of store price image requires a thorough knowledge of price management. So many different aspects are behind this area of marketing activities that managers become necessary to enter into related areas – e.g. consumer behavior psychology. Since the process of shaping the price image by consumers is a dynamic process, the management of price image cannot be perceived as static. Originality/Value – The main value of the article involves indication of complexity of the image price and thus difficulty of managing it. An overview of various approaches to the understanding of the price image, which is presented in the article, can facilitate an extremely demanding process of store price image management. Due to the current changes on the Polish retail market, it seems necessary to update the existing scientific achievements in the field of image price.

Preparation of Standard Unit Price of Goods and Services (SHBJ) in East Java Provincial Government

Forming standard unit price of goods and services is an activity survey to collect data required in Local Government and State requirements. Goods and services are under control of the Department or institution by the local government. Standards Unit Price of Goods and Services assist in preparing the Budget Requirement Plan, the regional work units and the Budget Implementation Document. Standards Unit Price of Goods and Services is to guide the preparation of the Budget Requirement Plan, the regional work units and the Budget Implementation Document work unit East Java Provincial Government. Data and information collection techniques are done by conducting market surveys, through distributors and the highest retail prices in stores and markets. The data types of goods and price list are based on the standard of the goods provided the provider distributors and stores. The interviews involves distributors, sellers to consumers. It also involves the data from Related Work Unit in cooperation with the Government of East Java to obtain secondary data. Conclusions are based on the description and presentation of data on survey results as the preparation of this Book Standard Unit Price of Goods and Services. This book is a guide to the standard unit price of goods and services that are indispensable in East Java Provincial Government work units. Keywords : standard unit price, goods and services, the province of East Java

Product Catalog Density of Online Stores: How Space Influences Store Price Perception and Consumer Preference

Previous research has shown that because offline store space is costly, customers tend to associate large interstitial space among products in a bricks-and-mortar store with high price. Drawing on consumer inference and signaling theories, the present research suggests this offline association could be overgeneralized to online contexts and lead customers to illogically infer high price based on large interstitial space among products in an online product catalog (i.e., online product catalog space, OPCS). We conducted five experiments to test whether and why OPCS affects customers’ online store price perception and its downstream effect on store evaluation. Our findings indicate that (1) an online store with larger OPCS is perceived to be selling more expensive products (Study 1); (2) the effect of OPCS is due to offline-online overgeneralization rather than online learning, because either a reminder of offline-online differences (Study 2) or sufficient web design knowledge (Study 3) diminishes the effect of OPCS on store price perception, and only people who believe that large offline space is linked with high price show this effect (Study 4); and (3) customers who care more about quality evaluate a store with larger OPCS more positively, whereas customers who care more about price do the opposite (Study 5). These findings contribute to literatures on web design, price perception, consumer inference in e-commerce, and offline-online behavior transfer. We also discuss implications for practice and offer suggestions for future works.

Price Setting in Online Markets: Basic Facts, International Comparisons, and Cross-Border Integration

We document basic facts about prices in online markets in the United States and Canada, which is a rapidly growing segment of the retail sector. Relative to prices in regular stores, prices in online markets are more flexible and exhibit stronger pass-through (60–75 percent) and faster convergence (half-life less than two months) in response to movements of the nominal exchange rate. Multiple margins of adjustment are active in the process of responding to nominal exchange rate shocks. Properties of goods, sellers, and markets are systematically related to pass-through and the speed of price adjustment for international price differentials. (JEL F31, F41, L11, L81)

Store Brands in Consumer Durables - A Success Story

Objectives: The paper aims to study the influences of price, store image, perceived quality, and brand association on customer satisfaction of electronic store brands. Is introducing store brand in electronic goods advantageous for the retailer? What makes the consumer to purchase a store brand? Methods/Statistical Analysis: The paper uses multivariate statistical techniques to understand the reasons behind the purchase of the store brands (both small and big appliances). This paper provides empirical insights about how the introduction of store brands is giving the retailer the competitive edge. Findings: The consumer prefers the store brand due to the store image, price, perceived quality and brand association of the retailer. Of these factors the most influential is the perceived quality. Examination of the preference of the consumer reveals that the retailer is able to retain his shoppers due to store brand. The prices have to be set carefully along with the increased perceived quality to retain them. Lately, many big retailers have added store brands in their assortment in all their product categories which is discussed in the media with their implications on the dominated channel management. Applications/Improvement: The main motivation for this research is the Neilson report on Global Private Label. This study provides a comprehensive evaluation of that trend especially with consumer durables.