Retail →
- 28 Jul 2014
- Research & Ideas
Eyes Shut: The Consequences of Not Noticing
In his new book The Power of Noticing: What the Best Leaders See, Max Bazerman explains how and why many executives fail to notice critical information in their midst. Open for comment; 0 Comments.
- 07 Jul 2014
- Research & Ideas
Banning Big-box Stores Can Hurt Local Retailers
Research by Raffaella Sadun shows how regulations meant to protect independent retailers from big-box stores may actually backfire. Closed for comment; 0 Comments.
- 13 May 2014
- Op-Ed
The Alibaba Effect
Alibaba's $200 billion mega-IPO is history-making in a number of ways. Bill Kirby and Warren McFarlan discuss what the deal says about Chinese entrepreneurship and American markets. Open for comment; 0 Comments.
- 05 Mar 2014
- What Do You Think?
When Will the Next Dot.com Bubble Burst?
Summing Up: Is that the sound of a dot.com bubble bursting? Could be, but is that a bad thing?, ask Jim Heskett's readers. Closed for comment; 0 Comments.
- 03 Mar 2014
- HBS Case
Decommoditizing the Canned Tomato
Most commodity producers look to cut costs aggressively. So why is Mutti S.p.a, an Italian producer of tomato products, paying farmers more than competitors? Mary Shelman discusses her case study. Closed for comment; 0 Comments.
- 26 Feb 2014
- Research & Ideas
How Grocery Bags Manipulate Your Mind
People who bring personal shopping bags to the grocery store to help the environment are more likely to buy organic items—but also to treat themselves to ice cream and cookies, according to new research by Uma R. Karmarkar and Bryan Bollinger. What's the Quinoa-Häagen-Dazs connection? Closed for comment; 0 Comments.
- 24 Feb 2014
- Research & Ideas
Busting Six Myths About Customer Loyalty Programs
Low-margin retailers argue they can't afford customer loyalty programs, but is that true? Rajiv Lal and Marcel Corstjens make the case that such programs are profit-enhancing differentiators. Closed for comment; 0 Comments.
- 05 Dec 2013
- What Do You Think?
Is Walmart Defying Economic Gravity?
Summing Up Can Walmart sustain its half-a-trillion-dollar enterprise much longer? Jim Heskett's readers see a conflict between the company's immense size and its business model. Closed for comment; 0 Comments.
- 11 Nov 2013
- Research & Ideas
A Smarter Way to Reduce Customer Defections
Companies can't afford to lose hard-won customers, but in truth some are more important to keep than others. Recent research by Sunil Gupta and Aurélie Lemmens explains how to find them. Closed for comment; 0 Comments.
- 10 Oct 2013
- Working Paper Summaries
Managing Churn to Maximize Profits
Customer defection or "churn" is a widespread phenomenon across a variety of industries. As customer acquisition costs continue to rise, managing customer churn has become critically important for the profitability of companies. This paper provides a novel method for determining which customers to target in order to maximize the profit of a retention campaign. The authors developed a binary classification method that uses a gain/loss matrix, which incorporates the gain of targeting and retaining the most valuable churners and the cost of incentives to the targeted customers. Results show that this approach leads to far more profitable retention campaigns than the traditional churn modeling approaches. In addition, the additional profits come at no cost for companies. The implementation of the retention campaign is unchanged, only the composition and size of the target group changes compared to traditional approaches. Key concepts include: The authors describe a new method of customer retention that leads to substantial improvements for companies with no additional implementation cost. Closed for comment; 0 Comments.
- 21 Aug 2013
- Research & Ideas
What Went Wrong at J.C. Penney?
J.C. Penney CEO Ron Johnson went bold in his attempted rescue of the fading retailer, but his top-to-bottom makeover failed. Marketing expert Rajiv Lal explores what went wrong and why JCP has an even more difficult road ahead. Closed for comment; 0 Comments.
- 08 Jul 2013
- Research & Ideas
Everything Must Go: A Strategy for Store Liquidation
Closing stores requires a deliberate, systematic approach to price markdowns and inventory transfers. The result, say Ananth Raman and Nathan Craig, is significant value for the retailer and new opportunities for others. Closed for comment; 0 Comments.
- 24 May 2013
- Working Paper Summaries
Improving Store Liquidation
Store liquidation, defined as the time-constrained divestment of retail stores through an in-store sale of inventory, is a critical aspect of the retail industry for both defunct and going concerns. Store liquidation is important for firms and investors, affecting everything from retailer performance to how retailers are financed and how investors are compensated. Further, store liquidation is fundamental to innovation in the retail sector, since extracting value from defunct stores and firms is a key step in the process of creative destruction. In this paper, the authors introduce methods for increasing the efficiency of store liquidations operated by retail asset disposition firms, and they thus extend management science techniques to a consequential problem that has not yet been addressed by the literature. These methods were developed through a collaboration with GBG, a prominent liquidator, during the liquidation of over $3B of inventory. Key concepts include: This paper introduces a method for improving the efficiency of store liquidations, i.e., for increasing the net orderly liquidation value (NOLV) of retail stores, with a focus on liquidations conducted by asset disposition firms. The method comprises a dynamic program that informs markdown, inventory, and store closing decisions as well as a demand forecasting model. In each of three recent applications, the authors show that their method provided a significant improvement over prior practice. Closed for comment; 0 Comments.
- 16 May 2013
- Working Paper Summaries
Marketplace or Reseller?
Intermediaries can often choose to operate as a marketplace, as a reseller, or as a hybrid having some products offered under each of the two different modes. For example, Alibaba.com, eBay.com, Premium Outlets, and Simon Malls act as marketplaces, in which suppliers sell directly to buyers via a platform. In contrast, retailers like 7-Eleven, Eastbay.com, Lowes, and Zappos.com resell the products they purchase from suppliers to buyers. A hybrid mode is also possible: For example, the largest electronics retailer in the United States, Best Buy, has taken a step towards the marketplace mode by allowing Apple, Samsung, and Microsoft to launch their own ministores within Best Buy stores. What economic tradeoffs drive an intermediary to adopt one mode over the other, or both? In this paper, the authors provide a new style of modeling intermediaries' strategic positioning decisions and a theory of which products an intermediary should offer in each mode. They also present a guide to how intermediaries should optimally position themselves between the two different modes. Managerial implications not only apply to an intermediary choosing between positioning itself as a pure reseller or a pure marketplace, but to hybrid modes in which the intermediary needs to determine how many products (and in the case of diverse products, which products) to offer in each mode. Key concepts include: A key distinction between marketplaces and resellers is the allocation of control rights between independent suppliers and the intermediary over non-contractible decisions (prices, advertising, customer service, responsibility for order fulfillment, etc.) pertaining to the products being sold. At the most basic level, a marketplace benefits from allowing suppliers to exploit their local information, whereas a reseller can exploit its own local information. Intermediaries should choose the marketplace mode for the following types of products: (1) products for which suppliers have a significant information advantage about the best way to market products relative to the intermediary; (2) products whose prices and marketing activities have limited spillovers on other products; (3) long-tail products; and (4) products provided by late stage ventures. On the other hand, intermediaries should choose the reseller mode for the following types of products: (1) products for which the intermediary has an information advantage about the best way to market products relative to suppliers; (2) products whose prices and marketing activities have significant spillovers on other products; (3) short-tail products; and (4) products provided by early stage ventures. Closed for comment; 0 Comments.
- 12 Nov 2012
- Research & Ideas
Pay Workers More So They Steal Less
New research by professor Tatiana Sandino confirms what many top companies have long believed: Good wages and benefits are linked to a company's low turnover and to happier, more honest workers. Closed for comment; 0 Comments.
- 05 Mar 2012
- Research & Ideas
Is JC Penney’s Makeover the Future of Retailing?
The stuffy department store chain has become emboldened under new CEO Ron Johnson, with plans for an innovative store upgrade, simplified prices, and a brand polish. Professor Rajiv Lal discusses whether Johnson can repeat his previous magic at Apple and Target. Closed for comment; 0 Comments.
- 10 Oct 2011
- Research & Ideas
Retailing Revolution: Category Killers on the Brink
Mass-market retailers, particularly big-box "category killers," are under critical pressure from online competitors. For retailers that can react quickly enough, this upheaval is survivable. But those slow to see the tsunami wave on the horizon stand to be swept away, according to professors Rajiv Lal and José B. Alvarez. Key concepts include: Retailing generally is at a tipping point, with category killers being the first significant casualties. Online competitors are making retail stores, which spent much of the last decade adding floor space, less productive. The impact of emerging technologies, expanding price and assortment transparency, and the increasing amount of excess retail space has created similar challenges for all mass-market retailers. Physical stores can compete by emphasizing instant gratification, unique shopping experiences, and customized support. Closed for comment; 0 Comments.
- 02 Aug 2011
- Working Paper Summaries
To Groupon or Not to Groupon: The Profitability of Deep Discounts
For consumers, online discount vouchers (like those offered by Groupon.com) have obvious appeal: discounts as large as 90 percent. But for retailers offering the deals through the site, does the publicity compensate for the deep hit to profit margins? This paper sets out to help small businesses decide whether it makes sense to offer discount vouchers. Research was conducted by Harvard Business School professor Ben Edelman, Business Economics PhD candidate Scott Duke Kominers, and by Sonia Jaffe of the Harvard University Department of Economics. Key concepts include: For retailers, discount vouchers provide price discrimination, letting merchants reach customers who know about the business, but wouldn't ordinarily go there without a discount. These vouchers also benefit merchants through advertising, simply by informing consumers of a merchant's existence via e-mail. For some merchants, the benefits of offering discount vouchers are sharply reduced if individual customers buy multiple vouchers. As a marketing tool, discount vouchers are likely to be more effective for businesses that are relatively unknown and have low marginal costs. Closed for comment; 0 Comments.
- 27 Jul 2011
- Research & Ideas
Customer Loyalty Programs That Work
Thanks to ever-improving technology, customer loyalty programs are proving extremely popular among retailers—but merchants are not getting all they should out of them. The reason? Professor José Alvarez says retailers need to see customers as partners, not transactions. Key concepts include: Most retailers are at a very basic level in using loyalty programs, and many customers see the programs as punitive. Successful retailers connect with customers via loyalty programs at three levels starting with an introduction, followed by a retailer-initiated communication, and finally with customer- or retailer-initiated feedback loops. Retailers should ask themselves, How do I create a partnership with the consumer? Data collected from these programs can help merchants make smarter decisions on everything from where to open a new store to pulling the plug on a fading brand. Closed for comment; 0 Comments.
Learning From Japan’s Remarkable Disaster Recovery
Harvard Business School students make an annual trek to businesses in the Japanese area wrecked by the 2011 earthquake and tsunami. Their objectives: learn all they can about human resilience and share their own management knowledge. Closed for comment; 0 Comments.