Disclosing Product Availability in Online Retail

2020 ◽  
Author(s):  
Eduard Calvo ◽  
Ruomeng Cui ◽  
Laura Wagner
Keyword(s):  
Information Disclosure ◽  
Problem Definition ◽  
Market Outcomes ◽  
Online Retail ◽  
Return Rates ◽  
Product Availability ◽  
Positive Effects ◽  
Online Retailers ◽  
Managerial Implications ◽  
Product Sales

Problem definition: Online retailers disclose product availability to influence customer decisions as a form of pressure selling designed to compel customers to rush into a purchase. Can the revelation of this information drive sales and profitability? We study the effect of disclosing product availability on market outcomes—product sales and returns—and identify the contexts where this effect is most powerful. Academic/practical relevance: Increasing sell-out is key for online retailers to remain profitable in the presence of thin margins and complex operations. We provide insights into how their information-disclosure policy—something they can tailor at virtually no cost—can contribute to this important objective. Methodology: We collaborate with an online retailer to procure a year of transaction data on 190,696 products that span 1,290 brands and 472,980 customers. To causally identify our results, we use a generalized difference-in-differences design with matching that exploits one policy of the firm: it discloses product availability only for the last five units. Results: The disclosure of low product availability increases hourly sales—they grow by 13.6%—but these products are more likely to be returned—product return rates increase by 17.0%. Because returns are costly, we also study net sales—product hourly sales minus hourly returns—which increase by 12.5% after the retailer reveals low availability. Managerial implications: The positive effects on sales and profitability amplify over wide assortments and when low-availability signals are abundantly visible and disclosed for deeply discounted products whose sales season is about to end. In addition, we propose a data-driven policy that exploits these results by using machine learning to prescribe the timing of disclosure of scarcity signals in order to boost sales without spiking returns.

When and why do negative reviews have positive effects?

2019 ◽  
Vol 11 (1) ◽  
pp. 87-101 ◽  
Author(s):  
Shuai Yang ◽  
Tao Li ◽  
Sixing Chen ◽  
Bin Li
Keyword(s):  
Secondary Data ◽  
Underlying Mechanism ◽  
Content Type ◽  
Customer Reviews ◽  
Positive Effects ◽  
Box Office ◽  
Managerial Implications ◽  
Multi Method Approach ◽  
Product Sales

Purpose People generally believe that business with negative word-of-mouth, such as negative customer reviews can hardly have good sales. But a number of intriguing examples seem to contradict such beliefs. Academic has so far begun to explore the possible positive effect of negative customer reviews, but without unfolding its underlying mechanism. This paper proposes a mechanism through which the variance of customer reviews moderates the effect of negative reviews on sales. Design/methodology/approach This study takes a multi-method approach in explaining the phenomenon, including an empirical analysis using secondary data from a movie review website and a movie box office website and a subsequent experimental study in a controlled experiment. Findings The findings of the study show that the effect of negative customer reviews on product sales is positive when the variance of customer reviews is large. Moreover, customers’ motivation to learn fully mediates the moderating effect of review variance on valence. Practical implications The findings provide vital managerial implications and suggest that managers should realize the important role of the review distribution. Originality/value This study mainly contributes to research on the negativity bias by identifying an important unexplored moderator and mediator and thus explains why negative customer review increases movie sales.

scholarly journals Online retail returns management

2016 ◽  
Vol 46 (6/7) ◽  
pp. 584-605 ◽  
Author(s):  
Michael Bernon ◽  
John Cullen ◽  
Jonathan Gorst
Keyword(s):  
Management Strategies ◽  
Management Process ◽  
Online Retail ◽  
Content Type ◽  
Return Rates ◽  
Qualitative And Quantitative ◽  
Online Sales ◽  
Management Processes ◽  
Managerial Implications ◽  
Returns Management

Purpose – With the rapid growth of consumer sales being fulfilled through omni-channel retailing, the purpose of this paper is to explore the subsequent impact on the levels of consumer retail returns experienced through online sales and the emergent returns management strategies being affected by retailers in relation to network configuration and returns management processes. Design/methodology/approach – The authors uses a mixed methods approach from an interpretive perspective. It is appropriate to describe the approach in terms of convergent design, since the authors have collected both qualitative and quantitative data. Findings – Return rates for online retailing can be double those for stores, while return levels for “considered purchases” remain similar. The findings suggest that omni-channel returns management has yet to fully mature and the authors find challenges for network design and returns processes in offering a seamless solution. Research limitations/implications – For practitioners the authors identify a number of challenges and offer insights to improve performance in returns management process, while for academic colleagues the authors propose a number of avenues for further research both in the qualitative and quantitative fields. Originality/value – While a significant body of extant literature exists, in researching the generalized retail returns management process this paper make a contribution by addressing the emergent managerial implications of omni-channel retail returns.

Value of Online–Off-line Return Partnership to Off-line Retailers

2021 ◽  
Author(s):  
Elina H. Hwang ◽  
Leela Nageswaran ◽  
Soo-Haeng Cho
Keyword(s):  
Problem Definition ◽  
Third Party ◽  
Data Sets ◽  
Online Retailers ◽  
Online Shoppers ◽  
Managerial Implications ◽  
Net Revenue ◽  
Online Channel ◽  
Improved Performance ◽  
Additional Value

Problem definition: This paper examines whether and, if so, how much an online–off-line return partnership between online and third-party retailers with physical stores (or “location partners”) generates additional value to location partners. Academic/practical relevance: Online shoppers often prefer to return products to stores rather than mailing them back. Many online retailers have recently started to collaborate with location partners to offer the store return option to their customers, and we quantify its economic benefit to a location partner. Methodology: We analyze proprietary data sets from Happy Returns (which provides return services for more than 30 online retailers) and one of its location partners, using a panel difference-in-differences model. In our study, a treatment is the initiation of the return service at each of the location partner’s stores, and an outcome is the store and online channel performance of the location partner. We then explore the mechanisms of underlying customer behavior that drive these outcomes. Results: We find that the partnership increases the number of unique customers, items sold, and net revenue in both store and online channels. We identify two drivers for this improved performance: (1) the location partner acquires new customers in both store and online channels, and (2) existing customers change their shopping patterns only in the store channel after using the return service; in particular, they visit stores more often, purchase more items, and generate higher revenue after their first return service. Managerial implications: To our knowledge, we provide the first direct empirical evidence of value to location partners from a return partnership, and as these partnerships become more prevalent, our findings have important managerial implications for location partners and online retailers alike.

Online Retail Service Quality: Scale Development and Validation

2021 ◽  
pp. 097226292110112
Author(s):  
Biranchi Narayan Swar ◽  
Rajesh Panda
Keyword(s):  
Service Quality ◽  
Technology Acceptance ◽  
Ease Of Use ◽  
Measurement Scale ◽  
Future Research ◽  
Market Place ◽  
Online Retail ◽  
Online Retailers ◽  
Retail Service ◽  
Retail Service Quality

The growth of online retailing has created an opportunity to create a scale specifically for online retail services. At the same time, the increasing rate of internet penetration in India coupled with electronic banking and wallets has formed new market place for many online retailers. In this context, to gain competitive advantage, the online retailers should provide better service quality. Thus, the present research tries to know the various constructs of retail service quality (RSQ) in online format and develop a measurement scale. The study has borrowed the constructs from ‘Retail Service Quality’ (RSQ) and ‘Technology Acceptance Model’ (TAM). For this purpose, we collected data from 600 respondents. The scale has been confirmed and validated by using CFA. The study confirmed that online RSQ (ORSQ) scale consists of four constructs: ‘Ease of Use’, ‘Problem Solving’, ‘Policy’ and ‘Reliability’ with 18 variables. The article has concluded and validated a scale for ORSQ which can help the online retailers to design their service offering. The implications of the ORSQ scale for practitioners, as well as for future research, are discussed in this article.

How Do Recommender Systems Lead to Consumer Purchases? A Causal Mediation Analysis of a Field Experiment

2021 ◽  
Author(s):  
Xitong Li ◽  
Jörn Grahl ◽  
Oliver Hinz
Keyword(s):  
Recommender Systems ◽  
Mediation Analysis ◽  
Search Costs ◽  
Consideration Sets ◽  
Consideration Set ◽  
Relevant Alternatives ◽  
Positive Effects ◽  
Online Retailers ◽  
Causal Mediation Analysis

The findings underscore the important role of consumers’ consideration sets in mediating the positive effects of recommender systems on consumer purchases. Practical strategies can be developed to facilitate the formation of the consideration sets. For example, to reduce consumers’ search costs and cognitive efforts, online retailers can display the recommended products in a descending order according to the predicted closeness of consumers’ preferences. Online retailers can further indicate the predicted closeness scores of consumers’ preferences for the recommended products. Given such a placement arrangement, consumers can quickly screen the recommended products and add the most relevant alternatives to their consideration sets, which should facilitate consumers’ shopping process and increase the shopping satisfaction. The findings also suggest that a larger consideration set due to the use of recommender systems could induce consumers to buy. Yet, it is difficult for consumers to manage many alternatives when the consideration set is very large. To facilitate consumers’ shopping process, online retailers need to consider strategies and tools that help consumers manage the alternatives in the consideration set in a better-organized manner and facilitate the comparison across the alternatives.

Partial Completion as a Nonprofit Strategy

2021 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Karthik Ramachandran
Keyword(s):  
Nonprofit Organizations ◽  
Service Provision ◽  
Problem Definition ◽  
Product Service ◽  
Service Portfolio ◽  
Wide Range ◽  
Partial Completion ◽  
Innovative Solution ◽  
Managerial Implications ◽  
Level 3

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constraints, some nonprofit organizations (NPOs) have adopted an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO’s choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO’s product or service portfolio. Academic/practical relevance: Although partial product or service provision has been observed in the nonprofit operations, there is limited understanding of when it is an appropriate strategy—a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO’s product/service completion and variety choices. Results: We identify when and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization versus fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations. (1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, even in the presence of ample resources. (2) Partial provision is particularly valuable when beneficiary needs are highly heterogeneous, or beneficiaries have high self-completion capabilities. A higher self-completion capability generally implies a lower optimal completion level; however, it may lead to either a higher or a lower optimal variety level. (3) Although providing incomplete products may appear to burden beneficiaries, a lower completion level can be optimal when fairness is factored into an NPO’s objective or when beneficiary capabilities are more heterogeneous.

The Effects of Patent Extension and Take-Back Regulation on Green Pharmacy

2021 ◽  
Author(s):  
Tianqin Shi ◽  
Nicholas C. Petruzzi ◽  
Dilip Chhajed
Keyword(s):  
Pharmaceutical Industry ◽  
Social Welfare ◽  
Technical Information ◽  
Problem Definition ◽  
Theoretic Model ◽  
Innovative Company ◽  
Take Back ◽  
Starting Point ◽  
European Environmental Agency ◽  
Managerial Implications

Problem definition: The eco-toxicity arising from unused pharmaceuticals has regulators advocating the benign design concept of “green pharmacy,” but high research and development expenses can be prohibitive. We therefore examine the impacts of two regulatory mechanisms, patent extension and take-back regulation, on inducing drug manufacturers to go green. Academic/practical relevance: One incentive suggested by the European Environmental Agency is a patent extension for a company that redesigns its already patented pharmaceutical to be more environmentally friendly. This incentive can encourage both the development of degradable drugs and the disclosure of technical information. Yet, it is unclear how effective the extension would be in inducing green pharmacy and in maximizing social welfare. Methodology: We develop a game-theoretic model in which an innovative company collects monopoly profits for a patented pharmaceutical but faces competition from a generic rival after the patent expires. A social-welfare-maximizing regulator is the Stackelberg leader. The regulator leads by offering a patent extension to the innovative company while also imposing take-back regulation on the pharmaceutical industry. Then the two-profit maximizing companies respond by setting drug prices and choosing whether to invest in green pharmacy. Results: The regulator’s optimal patent extension offer can induce green pharmacy but only if the offer exceeds a threshold length that depends on the degree of product differentiation present in the pharmaceutical industry. The regulator’s correspondingly optimal take-back regulation generally prescribes a required collection rate that decreases as its optimal patent extension offer increases, and vice versa. Managerial implications: By isolating green pharmacy as a potential target to address pharmaceutical eco-toxicity at its source, the regulatory policy that we consider, which combines the incentive inherent in earning a patent extension on the one hand with the penalty inherent in complying with take-back regulation on the other hand, serves as a useful starting point for policymakers to optimally balance economic welfare considerations with environmental stewardship considerations.

scholarly journals Investigating the Sustainability Performance of PPP-Type Infrastructure Projects: A Case of China

2018 ◽  
Vol 10 (11) ◽  
pp. 4162 ◽  
Author(s):  
Shengqin Zheng ◽  
Ke Xu ◽  
Qing He ◽  
Shaoze Fang ◽  
Lin Zhang
Keyword(s):  
Sustainable Development ◽  
Local Governments ◽  
Large Scale ◽  
Behavioral Control ◽  
Equation Model ◽  
Perceived Behavioral Control ◽  
Actual Behavior ◽  
Infrastructure Projects ◽  
Positive Effects ◽  
Managerial Implications

In China, the demand for public infrastructure projects is high due to the acceleration of urbanization and the rapid growth of the economy in recent years. Infrastructures are mainly large scale, so local governments have difficulty in independently completing financing work. In this context, public sectors often seek cooperation from private sectors, in which public–private partnership (PPP) is increasingly common. Although numerous studies have concentrated on sustainable development, the unsustainability performances of infrastructures are often reported on various media. Furthermore, studies on the sustainability performances of PPP-type infrastructure (PTI) projects are few from the perspective of private sectors’ behaviors. In this study, we adopted the modified theory of planned behavior and the structure equation model and conducted a questionnaire survey with 258 respondents for analyzing the sustainable behaviors of private sectors. Results indicated that behavioral attitude, perceived behavioral control, and subjective norm interact significantly. They have direct positive effects on behavioral intention and then indirectly influence actual behavior through this intention. Actual sustainable behaviors of private sectors have significantly positive effects on the sustainable development of cities. We offer theoretical and managerial implications for public and private sectors on the basis of the findings to ensure and promote the sustainability performances of PTI projects.

Antecedents of co-development and its effect on innovation performance

2019 ◽  
Vol 57 (7) ◽  
pp. 1609-1637 ◽  
Author(s):  
Hung-Tai Tsou ◽  
Ja-Shen Chen ◽  
Ya-Wen (Diana) Yu
Keyword(s):  
Partner Selection ◽  
Business Environment ◽  
Innovation Performance ◽  
Content Type ◽  
It Capability ◽  
Positive Effects ◽  
Business Ecosystem ◽  
Managerial Implications ◽  
Ict Industry ◽  
Survey Responses

Purpose In the contemporary business environment, companies must constantly consider methods to enhance their competitive advantage and create value for their customers. The purpose of this paper is to develop a research model based on a business ecosystem view. Within a business ecosystem, the authors identified the key factors of co-development and the manner in which these factors affect a company’s innovation performance. Design/methodology/approach The theoretical hypotheses are confirmed by partial least squares analysis of survey responses collected from information and communication technology (ICT) and hotel industries in Taiwan. Findings In both industries, the results suggest that a firm’s co-development within its own ecosystem has positive effects on innovation performance. For companies in the ICT industry, collaborative networks and partner selection have significant impacts on the firms’ co-development, but their information technology (IT) capability does not; in contrast, in the hotel industry, partner selection and IT capability have significant impacts on firm co-development, but their collaborative network does not. Originality/value This study contributes to the literature of business ecosystem and co-development by offering a co-development model. As both conceptual and empirical research on this topic is still underdeveloped, this study provides fresh insights into collaboration management and offers significant theoretical and managerial implications from a business ecosystem perspective.

Truthful Mechanisms for Medical Surplus Product Allocation

2020 ◽  
Vol 22 (4) ◽  
pp. 735-753 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Turgay Ayer ◽  
L. Beril Toktay
Keyword(s):  
Private Information ◽  
Value Added ◽  
Information Provision ◽  
Problem Definition ◽  
Preference Ranking ◽  
Additional Increase ◽  
Healthcare Facilities ◽  
Selection Decisions ◽  
Managerial Implications ◽  
Recipient Selection

Problem definition: We analyze a resource allocation problem faced by medical surplus recovery organizations (MSROs) that recover medical surplus products to fulfill the needs of underserved healthcare facilities in developing countries. The objective of this study is to identify implementable strategies to support recipient selection decisions to improve MSROs’ value provision capability. Academic/practical relevance: MSRO supply chains face several challenges that differ from those in traditional for-profit settings, and there is a lack of both academic and practical understanding of how to better match supply with demand in this setting where recipient needs are typically private information. Methodology: We propose a mechanism design approach to determine which recipient to serve at each shipping opportunity based on recipients’ reported preference rankings of different products. Results: We find that when MSRO inventory information is shared with recipients, the only truthful mechanism is random selection among recipients, which defeats the purpose of eliciting information. Subsequently, we show that (1) eliminating inventory information provision enlarges the set of truthful mechanisms, thereby increasing the total value provision; and (2) further withholding information regarding other recipients leads to an additional increase in total value provision. Finally, we show that under a class of implementable mechanisms, eliciting recipient valuations has no value added beyond eliciting preference rankings. Managerial implications: (1) MSROs with large recipient bases and low inventory levels can significantly improve their value provision by appropriately determining the recipients to serve through a simple scoring mechanism; (2) to truthfully elicit recipient needs information to support the recipient selection decisions, MSROs should withhold inventory and recipient-base information; and (3) under a set of easy-to-implement scoring mechanisms, it is sufficient for MSROs to elicit recipients’ preference ranking information. Our findings have already led to a change in the practice of an award-winning MSRO.

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