publication . Preprint . 2013

E-commerce as a Stockpiling Technology - Implications for Consumer Savings

Andrea Pozzi;
Open Access
  • Published: 01 Jan 2013
Abstract
Shopping on the Internet spares customers the discomfort of carrying around heavy and bulky baskets of goods, since the service usually includes home de- livery. This makes e-commerce a technology well suited to helping consumers to buy in bulk or to stockpile items on discount. I use grocery scanner data provided by a supermarket chain selling both online and through traditional stores to show that the introduction of e-commerce leads to an increase in bulk purchase and stockpiling behavior by customers. Since bulk and discounted items are sold at a lower price per unit, my findings highlight a new dimension in which online shopping can be beneficial to consume...
20 references, page 1 of 2

Boizot, C., J.-M. Robin, and M. Visser (2001): \The Demand for Food Products: An Analysis of Interpurchase Times and Purchased Quantities," Economic Journal, 111, 391{419. [OpenAIRE]

Brown, J. R., and A. Goolsbee (2002): \Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," The Journal of Political Economy, 110(3), 481{507. [OpenAIRE]

Brynjolfsson, E., Y. J. Hu, and D. Simester (2011): \Goodbye Pareto Principle, Hello Long Tail: The E ect of Search Costs on Concentration of Product Sales," Management Science, 55(11), 1755{1765.

Brynjolfsson, E., and M. D. Smith (2000): \Frictionless Commerce? A Comparison of Internet and Conventional Retailers.," Management Science, 46(4), 563{.

Brynjolfsson, E., J. H. Yu, and M. D. Smith (2003): \Consumer Surplus in Cameron, C. A., J. B. Gelbach, and D. L. Miller (2011): \Robust Inference with Multiway Clustering," Journal of Business and Economic Statistics, 29(2), 238{249.

Chintagunta, P., J. Chu, and J. Cebollada (2012): \Quantifying Trasnsaction Costs in Online/O -line Grocery Channel Choice," Marketing Science, 31(1), 96{ 114.

Chu, J., P. Chintagunta, and J. Cebollada (2008): \A Comparison of WithinHousehold Price Sensitivity across Online and O ine Channels," Marketing Science, 27, 283{299. [OpenAIRE]

Danaher, P. J., I. W. Wilson, and R. A. Davis (2003): \A Comparison of Online and O ine Consumer Brand Loyalty.," Marketing Science, 22(4), 461{476.

Ellison, G., and S. Ellison (2009): \Search, Obfuscation, and Price Elasticities on the Internet," Econometrica, 77, 427{452.

Erdem, T., S. Imai, and M. Keane (2003): \Price and Promotion Expectations: Capturing Consumer Brand and Quantity Choice Dynamics under Price Uncertainty," Quantitative Marketing and Economics, 1, 5{64. [OpenAIRE]

Goldfarb, A., R. C. McDevitt, S. Samila, and B. Silverman (2012): \The E ect of Social Interaction on Economic Transactions: An Embarrassment of Niches," working paper.

Griffith, R., E. Leibtag, A. Leicester, and A. Nevo (2009): \Consumer Shopping Behavior: How Much Do Consumers Save?," Journal of Economic Perspectives, 23(2), 99{120.

Hendel, I., and A. Nevo (2004): \Intertemporal Substitution and Storable Products," Journal of the European Economic Association, 2(2-3), 536{547. (2006a): \Measuring the Implications of Sales and Consumer Inventory Behavior," Econometrica, 74(6), 1637{1673. [OpenAIRE]

(2006b): \Sales and Consumer Inventory," The RAND Journal of Economics, 37(3), 543{561.

Neslin, S. A., C. Henderson, and J. Quelch (1985): \Consumer Promotions and the Acceleration of Product Purchases," Marketing Science, 4, 147{165. [OpenAIRE]

20 references, page 1 of 2
Abstract
Shopping on the Internet spares customers the discomfort of carrying around heavy and bulky baskets of goods, since the service usually includes home de- livery. This makes e-commerce a technology well suited to helping consumers to buy in bulk or to stockpile items on discount. I use grocery scanner data provided by a supermarket chain selling both online and through traditional stores to show that the introduction of e-commerce leads to an increase in bulk purchase and stockpiling behavior by customers. Since bulk and discounted items are sold at a lower price per unit, my findings highlight a new dimension in which online shopping can be beneficial to consume...
20 references, page 1 of 2

Boizot, C., J.-M. Robin, and M. Visser (2001): \The Demand for Food Products: An Analysis of Interpurchase Times and Purchased Quantities," Economic Journal, 111, 391{419. [OpenAIRE]

Brown, J. R., and A. Goolsbee (2002): \Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," The Journal of Political Economy, 110(3), 481{507. [OpenAIRE]

Brynjolfsson, E., Y. J. Hu, and D. Simester (2011): \Goodbye Pareto Principle, Hello Long Tail: The E ect of Search Costs on Concentration of Product Sales," Management Science, 55(11), 1755{1765.

Brynjolfsson, E., and M. D. Smith (2000): \Frictionless Commerce? A Comparison of Internet and Conventional Retailers.," Management Science, 46(4), 563{.

Brynjolfsson, E., J. H. Yu, and M. D. Smith (2003): \Consumer Surplus in Cameron, C. A., J. B. Gelbach, and D. L. Miller (2011): \Robust Inference with Multiway Clustering," Journal of Business and Economic Statistics, 29(2), 238{249.

Chintagunta, P., J. Chu, and J. Cebollada (2012): \Quantifying Trasnsaction Costs in Online/O -line Grocery Channel Choice," Marketing Science, 31(1), 96{ 114.

Chu, J., P. Chintagunta, and J. Cebollada (2008): \A Comparison of WithinHousehold Price Sensitivity across Online and O ine Channels," Marketing Science, 27, 283{299. [OpenAIRE]

Danaher, P. J., I. W. Wilson, and R. A. Davis (2003): \A Comparison of Online and O ine Consumer Brand Loyalty.," Marketing Science, 22(4), 461{476.

Ellison, G., and S. Ellison (2009): \Search, Obfuscation, and Price Elasticities on the Internet," Econometrica, 77, 427{452.

Erdem, T., S. Imai, and M. Keane (2003): \Price and Promotion Expectations: Capturing Consumer Brand and Quantity Choice Dynamics under Price Uncertainty," Quantitative Marketing and Economics, 1, 5{64. [OpenAIRE]

Goldfarb, A., R. C. McDevitt, S. Samila, and B. Silverman (2012): \The E ect of Social Interaction on Economic Transactions: An Embarrassment of Niches," working paper.

Griffith, R., E. Leibtag, A. Leicester, and A. Nevo (2009): \Consumer Shopping Behavior: How Much Do Consumers Save?," Journal of Economic Perspectives, 23(2), 99{120.

Hendel, I., and A. Nevo (2004): \Intertemporal Substitution and Storable Products," Journal of the European Economic Association, 2(2-3), 536{547. (2006a): \Measuring the Implications of Sales and Consumer Inventory Behavior," Econometrica, 74(6), 1637{1673. [OpenAIRE]

(2006b): \Sales and Consumer Inventory," The RAND Journal of Economics, 37(3), 543{561.

Neslin, S. A., C. Henderson, and J. Quelch (1985): \Consumer Promotions and the Acceleration of Product Purchases," Marketing Science, 4, 147{165. [OpenAIRE]

20 references, page 1 of 2
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