The Effects of Menu Costs on Retail Performance: Evidence from Adoption of the Electronic Shelf Label Technology

Autor:	Achal Bassamboo, Antonio Moreno, Ioannis Stamatopoulos
Rok vydání:	2021
Předmět:	Revenue management Strategy and Management 0502 economics and business 05 social sciences Dynamic pricing 050211 marketing Business 050207 economics Management Science and Operations Research Industrial organization Electronic shelf label
Zdroj:	Management Science. 67:242-256
ISSN:	1526-5501 0025-1909
Popis:	We use the adoption of electronic shelf labels (ESLs) by an international grocery retailer in 2015 to identify the effects of physical menu costs (i.e., labor and material costs of price adjustment) on retail performance. We find that the installation of ESLs increased gross margins substantially, which implies profit gains that go far beyond labor cost savings. We also explore the mechanism behind this effect. We find that the lift in gross margins was associated with an increase in quantity sold and a decrease in price per unit sold, and that the lift primarily came from low-shelf life product categories. Moreover, we find that more and smaller price changes occurred with ESLs. These additional price changes were mostly price decreases, and they were dispersed in time. Our findings are consistent with reductions in both variable and fixed menu costs (i.e., both costs that scale with the number of products affected and costs that do not). This paper was accepted by Vishal Gaur, operations management.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::fd6fba483314b88a50ec8f93a867bc63 https://doi.org/10.1287/mnsc.2019.3551 Zobrazit plný text záznamu