Estimating Substitution and Basket Effects in Retail Stores: Implications for Assortment Planning

Published Online:https://doi.org/10.1287/mnsc.2021.4128

References

  • Agrawal N, Smith SA (2003) Optimal retail assortments for substitutable items purchased in sets. Naval Res. Logist. 50(7):793–822.CrossrefGoogle Scholar
  • Alptekinoğlu A, Grasas A, Akçal A (2009) Is assortment selection a popularity contest? Consumer-Driven Demand and Operations Management Models (Springer, New York), 205–228.CrossrefGoogle Scholar
  • Bell DR, Lattin JM (1998) Shopping behavior and consumer preference for store price format: Why “large basket” shoppers prefer EDLP. Marketing Sci. 17(1):66–88.LinkGoogle Scholar
  • Bell DR, Gallino S, Moreno A (2017) Offline showrooms in omnichannel retail: Demand and operational benefits. Management Sci. 64(4):1629–1651.LinkGoogle Scholar
  • Bhatnagar A, Ratchford BT (2004) A model of retail format competition for non-durable goods. Internat. J. Res. Marketing 21(1):39–59.CrossrefGoogle Scholar
  • Boatwright P, Nunes JC (2001) Reducing assortment: An attribute-based approach. J. Marketing 65(3):50–63.CrossrefGoogle Scholar
  • Borle S, Boatwright P, Kadane JB, Nunes JC, Galit S (2005) The effect of product assortment changes on customer retention. Marketing Sci. 24(4):616–622.LinkGoogle Scholar
  • Briesch RA, Chintagunta PK, Fox EJ (2009) How does assortment affect grocery store choice? J. Marketing Res. 46(2):176–189.CrossrefGoogle Scholar
  • Broniarczyk SM, Hoyer WD, McAlister L (1998) Consumers’ perceptions of the assortment offered in a grocery category: The impact of item reduction. J. Marketing Res. 35(2):166–176.CrossrefGoogle Scholar
  • Cachon GP, Kök AG (2007) Category management and coordination in retail assortment planning in the presence of basket shopping consumers. Management Sci. 53(6):934–951.LinkGoogle Scholar
  • Chaing J (1991) A simultaneous approach to the whether, what and how to buy question. Marketing Sci. 10(4):297–315.LinkGoogle Scholar
  • Chen Y, Hess JD, Wilcox RT, Zhang ZJ (1999) Accounting profits vs. marketing profits: A relevant metric for category management. Marketing Sci. 18(3):208–229.LinkGoogle Scholar
  • Chernev A (2005) Feature complementarity and assortment in choice. J Consumer Res. 31(4):748–759.Google Scholar
  • Chernev A (2006) Decision focus and consumer choice among assortments. J. Consum. Res. 33(1):50–59.CrossrefGoogle Scholar
  • Chintagunta PK (1993) Investigating purchase incidence, brand choice and purchase quantity decisions of households. Marketing Sci. 12(2):184–208.LinkGoogle Scholar
  • Chong JK, Ho TH, Tang CS (2001) A modeling framework for category assortment planning. Manufacturing Service Oper. Management 3(3):191–210.LinkGoogle Scholar
  • DeHoratius N, Raman A (2008) Inventory record inaccuracy: an empirical analysis. Management Sci. 54(4):627–641.LinkGoogle Scholar
  • Dennis S (2018) For a growing number of retailers, small is the new black. Accessed January 5, 2021, https://www.forbes.com/sites/stevendennis/2018/07/26/for-a-growing-number-of-retailers-small-is-the-new-black/#2453a7f8590b.Google Scholar
  • Dreze X, Hoch SJ, Purk ME (1994) Shelf management and space elasticity. J. Retailing 70(4):301–326.CrossrefGoogle Scholar
  • Fabius V, Kohli S, Timelin B, Moulvad Veranen S (2020) How covid-19 is changing consumer behavior now and forever. Accessed January 5, 2021, https://www.mckinsey.com/industries/retail/our-insights/how-covid-19-is-changing-consumer-behavior-now-and-forever.Google Scholar
  • Fisher M, Vaidyanathan R (2014) A demand estimation procedure for retail assortment optimization with results from implementations. Management Sci. 60(10):2401–2415.LinkGoogle Scholar
  • Gallino S, Moreno A (2014) Integration of online and offline channels in retail: The impact of sharing reliable inventory availability information. Management Sci. 60(6):1434–1451.LinkGoogle Scholar
  • Gallino S, Moreno A, Stamatopoulos I (2017) Channel integration, sales dispersion, and inventory management. Management Sci. 63(9):2813–2831.LinkGoogle Scholar
  • Gaur V, Honhon D (2006) Assortment planning and inventory decisions under a locational choice model. Management Sci. 52(10):1528–1543.LinkGoogle Scholar
  • Guadagni PM, Little JD (1983) A logit model of brand choice calibrated on scanner data. Marketing Sci. 2(3):203–238.LinkGoogle Scholar
  • Honhon D, Gaur V, Seshadri S (2010) Assortment planning and inventory decisions under stockout-based substitution. Oper. Res. 58(5):1364–1379.LinkGoogle Scholar
  • Iyengar SS, Lepper MR (2000) When choice is demotivating: Can one desire too much of a good thing? J. Personality Soc. Psychol. 79(6):995–1006.CrossrefGoogle Scholar
  • Kalyanam K, Borle S, Boatwright P (2007) Deconstructing each item’s category contribution. Marketing Sci. 26(3):327–341.LinkGoogle Scholar
  • Kaufman L, Rousseeuw PJ (2009) Finding Groups in Data: An Introduction to Cluster Analysis, vol. 344 (John Wiley & Sons, New York).Google Scholar
  • Kesavan S, Staats BR, Gilland W (2014) Volume flexibility in services: The costs and benefits of flexible labor resources. Management Sci. 60(8):1884–1906.LinkGoogle Scholar
  • Kök AG, Fisher ML (2007) Demand estimation and assortment optimization under substitution: Methodology and application. Oper. Res. 55(6):1001–1021.LinkGoogle Scholar
  • Kök AG, Fisher ML, Vaidyanathan R (2009) Assortment planning: Review of literature and industry practice. Retail Supply Chain Management 122:99–153.CrossrefGoogle Scholar
  • Mahajan S, Van Ryzin G (2001a) Inventory competition under dynamic consumer choice. Oper. Res. 49(5):646–657.LinkGoogle Scholar
  • Mahajan S, Van Ryzin G (2001b) Stocking retail assortments under dynamic consumer substitution. Oper. Res. 49(3):334–351.LinkGoogle Scholar
  • Manchanda P, Ansari A, Gupta S (1999) The “shopping basket”: A model for multicategory purchase incidence decisions. Marketing Sci. 18(2):95–114.LinkGoogle Scholar
  • Meyersohn N (2019) Why big retailers are getting smaller. Accessed January 5, 2021, https://www.cnn.com/2019/03/10/business/target-small-stores-new-york-los-angeles/index.html.Google Scholar
  • Qu L (2020) Small box is the new big box. Accessed January 5, 2021, https://businessreview.berkeley.edu/small-box-is-the-new-big-box/.Google Scholar
  • Ren CR, Hu Y, Hu Y, Hausman J (2011) Managing product variety and collocation in a competitive environment: An empirical investigation of consumer electronics retailing. Management Sci. 57(6):1009–1024.LinkGoogle Scholar
  • Ripsam T, Martinez A, Navarro C (2007) Big impact in a small format. Accessed January 5, 2021, https://www.strategy-business.com/article/li00030?gko=99662.Google Scholar
  • Rooderkerk RP, Van Heerde HJ, Bijmolt TH (2013) Optimizing retail assortments. Marketing Sci. 32(5):699–715.LinkGoogle Scholar
  • Shugan SM (1980) The cost of thinking. J. Consum. Res. 7(2):99–111.CrossrefGoogle Scholar
  • Smith SA, Agrawal N (2000) Management of multi-item retail inventory systems with demand substitution. Oper. Res. 48(1):50–64.LinkGoogle Scholar
  • Song I, Chintagunta PK (2006) Measuring cross-category price effects with aggregate store data. Management Sci. 52(10):1594–1609.LinkGoogle Scholar
  • Tan TF, Netessine S, Hitt L (2017) Is Tom Cruise threatened? An empirical study of the impact of product variety on demand concentration. Inform. Systems Res. 28(3):643–660.LinkGoogle Scholar
  • Target Annual Report (2019) https://www.annualreports.com/HostedData/AnnualReportArchive/t/NYSE_TGT_2019.pdf.Google Scholar
  • Teunter RH, Babai MZ, Syntetos AA (2010) Abc classification: service levels and inventory costs. Production Oper. Management 19(3):343–352.CrossrefGoogle Scholar
  • Van Ryzin G, Mahajan S (1999) On the relationship between inventory costs and variety benefits in retail assortments. Management Sci. 45(11):1496–1509.LinkGoogle Scholar
  • Vulcano G, Van Ryzin G, Ratliff R (2012) Estimating primary demand for substitutable products from sales transaction data. Oper. Res. 60(2):313–334.LinkGoogle Scholar
  • Walmart Annual Report (2019) https://www.annualreports.com/HostedData/AnnualReportArchive/w/NYSE_WMT_2019.pdf.Google Scholar
  • Ward J, Zhang B, Jain S, Fry C, Olavson T, Mishal H, Amaral J, et al. (2010) HP transforms product portfolio management with operations research. Interfaces 40(1):17–32.LinkGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.