Strategic Visual Merchandising of New and Open-Box Products: Evidence from Experiment and Retail Data

被引：0

作者：

Ertekin N. ^{[1
]}

Ding Y. ^{[1
]}

Donohue K. ^{[1
]}

机构：

[1] Carlson School of Management, University of Minnesota, Minneapolis, 55455, MN

来源：

Management Science | 2024年 / 70卷 / 04期

关键词：

consumer returns; empirical retail operations; open-box products; visual merchandising;

D O I：

10.1287/MNSC.2023.4786

中图分类号：

学科分类号：

摘要：

Retailers are increasingly selling returned products as open-box along with their new product offerings. Whereas some retailers position open-box products side-by-side with their new counterparts in the assortment (i.e., side-by-side strategy), other retailers position them separately in a different part of the retail space/website (i.e., separate strategy). We conduct multimethodology research to investigate the effectiveness of these two visual merchandising strategies. First, using a choice-based conjoint design in a controlled behavioral experiment, we identify how the two strategies affect the perceived value of new products. Next, using proprietary data from a retailer that has implemented both strategies across different stores, we empirically test the impact of each strategy on new product sales and returns under real market conditions. Finally, we extend our empirical analysis to prescribe how retailers can identify the right visual merchandising strategy for a given product profile. Overall, our results reveal a novel trade-off between the two visual merchandising strategies. With respect to retail revenue, the separate strategy outperforms the side-by-side strategy as we find that new product sales are higher with the separate strategy. However, with respect to retail cost, the side-by-side strategy outperforms the separate strategy as we find that new product returns are lower with the side-by-side strategy. Our extended analysis reveals that this tradeoff varies by product profile. Using counterfactual analysis, we further demonstrate that customizing the visual merchandising strategy by product mix could increase profit by 3.2% at the focal retailer. © 2024 INFORMS Inst.for Operations Res.and the Management Sciences. All rights reserved.

引用

页码：2047 / 2065

页数：18

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