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AU — Online shopping and potential changes to the low value threshold: costs and benefits for government, consumers and retailers

November 25, 2014 Comments off

Online shopping and potential changes to the low value threshold: costs and benefits for government, consumers and retailers
Source: Parliamentary Library of Australia

Australians spent $15.7 billion in the year to August 2014 buying online from both international and Australian retailers. Online shopping by Australians has increased over time, and is likely to continue doing so. A significant portion of Australian purchases online are from Australian retailers.

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Understanding Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications

November 17, 2014 Comments off

Understanding Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications
Source: Stanford Graduate School of Business

This paper investigates the in-flight marketplace. It uses detailed data of in-flight purchases to characterize the factors underlying purchasing behavior, including pre- and in-flight factors and in particular social effects. We find that the number of passengers and the flight duration increase in-flight sales. Delays also increase in-flight purchases but they suffer cannibalization from compensations offered to passengers. At the individual level we show that the classical social influence theories do not suffice to explain all patterns in the data. Omission neglect, product contagion and goal balancing are proposed as complementary theories. The analysis shows social effects play a significant role: On average a passenger is approximately 30% more likely to buy after being exposed to a lateral purchase. Importantly, we find that willingness to buy is positively correlated with responsiveness to social influence. Because of this homophily and social feedback effects, otherwise nuisance factors, can provide targeting value for the firm: Behavioral-based targeting can up to double the relative social spillovers of marketing actions.

Black Friday forecast looks bright; Cyber Monday sales expected to grow 15.0%

November 17, 2014 Comments off

Black Friday forecast looks bright; Cyber Monday sales expected to grow 15.0%
Source: IBISWorld

The holiday shopping season will officially kick off at the end of this month, and shoppers will be gearing up to score some major deals. The stronger US economy, higher e-commerce sales and earlier store openings on Thanksgiving will boost retail spending during the upcoming holiday shopping period. Total spending over this year’s Black Friday weekend is forecast to rise 1.8% to $36.7 billion. The biggest contributor to holiday spending growth will be online sales, as Cyber Monday revenue growth reaches double digits for the fifth consecutive year. Meanwhile, Americans will spend an estimated $8.4 billion this year on Thanksgiving food and drinks, gifts and decorations, reflecting a 1.7% increase from 2013.

Serving Today’s Military Consumers

November 6, 2014 Comments off

Serving Today’s Military Consumers
Source: Nielsen

Veterans Day, originally founded to remember the cease-fire of World War I, has become a day for Americans to remember and honor all veterans, as well as active-duty members of the U.S. military.

But we aren’t the only ones who should remember these national heroes. Whether they’re on active duty or have already served their country, today’s military members and their families are also consumers. By understanding these shoppers and their families’ unique consumer habits, retailers and manufacturers can better reach this segment of the population and serve their specific needs.

Deloitte Survey: Economic Optimism Warms Holiday Shoppers

October 30, 2014 Comments off

Deloitte Survey: Economic Optimism Warms Holiday Shoppers
Source: Deloitte

Optimism about the economy is kindling holiday cheer as shoppers plan to spend more this year and tech-savvy shoppers have even higher spending expectations, according to Deloitte’s 29th annual holiday survey. Among the findings:

Holiday spending to increase — consumers who shop across store, mobile and online channels are expected to spend more than single-channel shoppers

  • Total holiday spending is predicted to increase by 13 percent to $1,299 per household, and includes gifts, socializing away from home, entertaining at home, non-gift clothing for family or self, home/holiday furnishings, and any other holiday-related spending not in the other categories.
  • Spending on just gifts is expected to rise by 9 percent to $458 this year, from $421 last year.
  • Consumers who shop across store, mobile and online channels are expected to spend 66 percent more on gifts than those shopping stores only, $592 versus $357.
  • The number of gifts consumers expect to purchase increased to 13.4, up from 12.9 in 2013, but nearly 10 gifts less than the high of 23.1 in 2007.

Measuring Price Discrimination and Steering on E-commerce Web Sites

October 28, 2014 Comments off

Measuring Price Discrimination and Steering on E-commerce Web Sites (PDF)
Source: Northeastern University

Today, many e-commerce websites personalize their content, including Netflix (movie recommendations), Amazon (product suggestions), and Yelp (business reviews). In many cases, personalization provides advantages for users: for example, when a user searches for an ambiguous query such as “router,” Amazon may be able to suggest the woodworking tool instead of the networking device. However, personalization on e-commerce sites may also be used to the user’s disadvantage by manipulating the products shown (price steering) or by customizing the prices of products (price discrimination). Unfortunately, today, we lack the tools and techniques necessary to be able to detect such behavior.

In this paper, we make three contributions towards addressing this problem. First, we develop a methodology for accurately measuring when price steering and discrimination occur and implement it for a variety of e-commerce web sites. While it may seem conceptually simple to detect differences between users’ results, accurately attributing these dfferences to price discrimination and steering requires correctly addressing a number of sources of noise. Second, we use the accounts and cookies of over 300 real-world users to detect price steering and discrimination on 16 popular e-commerce sites. We find evidence for some form of personalization on nine of these e-commerce sites. Third, we investigate the effect of user behaviors on personalization. We create fake accounts to simulate different user features including web browser/OS choice, owning an account, and history of purchased or viewed products. Overall, we find numerous instances of price steering and discrimination on a variety of top e-commerce sites.

Why Are Wal-Mart and Target Next-Door Neighbors?

October 21, 2014 Comments off

Why Are Wal-Mart and Target Next-Door Neighbors? (PDF)
Source: Federal Reserve Board

One of the most notable changes in the U.S. retail market over the past twenty years has been the rise of Big Box stores, retail chains characterized by physically large stores selling a wide range of consumer goods at discount prices. A growing literature has examined the impacts of Big Box stores on other retailers and consumers, but relatively little is known about how Big Box stores choose locations. Because Big Box stores offer highly standardized products and compete primarily on price, it is likely that they will seek to establish spatial monopolies, far from competitor stores. In this paper, I examine where new Big Box stores locate with respect to three types of existing establishments: own-firm stores, other retailers in the same product space (competitors), and retailers in other product spaces (complements). Results indicate that new Big Box stores tend to avoid existing own-firm stores and locate near complementary Big Box stores. However, there is little evidence that new Big Boxes avoid competitors. Firms in the same product space may not be perfect substitutes, or firms may prefer to share consumers in a desirable location rather than cede the entire market to competitor firms.

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