Industrial organization models in retailing.

摘要

According to the 2007 United States business census the retail trade industry is a ;In the first chapter of this dissertation I study assortment planning, where a retailer decides which products to place on their store shelves. This is one of the most fundamental decisions in retailing and is an important driver of consumers' shopping decisions. With the ever increasing number of products available to retailers, category managers face a complex decision to select the "right" assortment for their categories. These assortment decisions are impacted by local consumer preferences, competition and costs. Under these conditions, a retailer's optimization problem is mathematically daunting and empirically challenging. Here I address the analytical and empirical challenges of modeling retailers' assortment decisions. The analytical model shows that the optimal retail assortment can be described by ranking products based on a combination of demand and cost parameters. In the empirical study, I use these analytical results to model supermarket assortment decisions across 10 categories and 34 local markets. We quantify the impact of local demand preferences, competition and costs on assortment decisions. The results indicate that local preferences can lead to large differences in assortments for stores in the same chain. Competition between retail stores can result in an increase in assortment size and a decrease in retail prices. Manufacturer wholesale price discounts are most effective when given to large retail stores. And the differences in levels of assortment across categories are driven by the size of products in the category and whether or not they require refrigeration.;In the second chapter of this dissertation I study retailer credit cards as a form of retail services. In 2003, the U.S. market for retail credit cards topped ;The final chapter of my dissertation considers retail category captaincy arrangements. Category management (CM) is a process for managing product categories as individual business units to enhance consumer benefits. While profitable, CM is difficult and expensive for retailers. A common approach taken by retailers is to select one of their manufacturers as a category captain (CC), who assists the retailers with CM. In this chapter, we study this category captaincy arrangement, in particular ask the question - which manufacturer should the retailer select as their category captain? While common belief is that it should be the largest manufacturer in the industry, We show in an analytical and empirical model that this is not always the case. The analytical model shows that with sufficient levels differentiation and substitutability between the products it optimal for the retailer to select the smaller retailer as their category captain. We study competition between two leading retail chains in a large mid-western city for a large CPG category with three leading manufacturers. The current pricing data suggest that these chains are not currently utilizing CM therefore we can derive the optimal CC arrangement for the two retailers. In this market the only pure strategy equilibrium is for both retail chain to select the smallest retailer as their category captain. Furthermore, policy makers allowing category captaincy arrangement must be particular about manufacturer setting up firewalls within their firms. As without such restrictions, category captain arrangements can be socially harmful and reduce consumer welfare.