Store within a Store

Jerath, Kinshuk; Zhang, Z. John

doi:10.1509/jmkr.47.4.748

Cited by 157 publications

(119 citation statements)

References 30 publications

(29 reference statements)

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“…We contrast this result with the results in McGuire and Staelin (1983) and Jerath and Zhang (2010). In our case, as competition increases, there is a shift away from reselling and towards agency selling.…”

Section: Proposition 2 As Competition In the Market Increases (Ie contrasting

confidence: 80%

“…In other words, the decision on the selling format is a longer-term decision than the decision on wholesale price. This timing is also in accordance with modeling choices in previous papers on vertical channel structures, e.g., (McGuire and Staelin, 1983, Moorthy, 1988, Jerath and Zhang, 2010. The following matrix represents the game between the e-tailers in strategic form (where…”

Section: Equilibrium Selling Formatssupporting

confidence: 71%

“…3 Linear demand models have been used in the marketing and economics literatures previously to model differentiated duopolies (Shubik and Levitan, 1980, Singh and Vives, 1984, Raju el al., 1995, Jerath and Zhang, 2010. 4 The demand system above gives us a model of partial competition where β ∈ [0, 1) is the parameter that captures the degree of differentiation between the two e-tailers.…”

Section: Electronic Channelmentioning

confidence: 99%

“…Similar quadratic utility functions have been used in Singh and Vives (1984), Raju el al. (1995) and Jerath and Zhang (2010). This utility function for a representative consumer assumes that positive non-integer amounts of each product may be consumed.…”

Section: Electronic Channelmentioning

confidence: 99%

“…In Jerath and Zhang (2010), where a monopolistic retailer decides the channel structure, as competition increases, there is a shift away from the store within a store arrangement (which is the brick-and-mortar analogue of agency selling). Thus, our result complements the findings in these papers.…”

Section: Proposition 2 As Competition In the Market Increases (Ie mentioning

confidence: 99%

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Agency Selling or Reselling? Channel Structures in Electronic Retailing

2016

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In recent years, online retailers (e-tailers) have started allowing manufacturers direct access to their customers while charging a fee for providing this access, a format commonly referred to as agency selling. In this paper, we use a stylized theoretical model to answer a key question that e-tailers are facing: When should they use an agency selling format instead of using the more conventional reselling format? We find that agency selling is more efficient than reselling and leads to lower retail prices; however, the e-tailers end up giving control over retail prices to the manufacturer. Therefore, the reaction by the manufacturer, who makes electronic channel pricing decisions based on their impact on demand in the traditional channel (brick-and-mortar retailing), is an important factor for e-tailers to consider. We find that when sales in the electronic channel lead to a negative effect on demand in the traditional channel, e-tailers prefer agency selling, whereas when sales in the electronic channel lead to substantial stimulation of demand in the traditional channel, e-tailers prefer reselling. This preference is mediated by competition between e-tailers -as competition between them increases, e-tailers prefer to use agency selling. We also find that when e-tailers benefit from positive externalities from the sales of the focal product (such as additional profits from sales of associated products), retail prices may be lower under reselling than under agency selling, and the e-tailers prefer reselling under some conditions for which they would prefer agency selling without the positive externalities.

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Section: Proposition 2 As Competition In the Market Increases (Ie contrasting

confidence: 80%

Section: Equilibrium Selling Formatssupporting

confidence: 71%

Section: Electronic Channelmentioning

confidence: 99%

Section: Electronic Channelmentioning

confidence: 99%

Section: Proposition 2 As Competition In the Market Increases (Ie mentioning

confidence: 99%

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Agency Selling or Reselling? Channel Structures in Electronic Retailing

2016

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Effectiveness of self‐run vs. third‐party sales channels on the consumers' purchase intention: A multi‐method exploration of the moderating role of review volume

Song

et al. 2023

J of Consumer Behaviour

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In practice, many prominent electronic retailers (e‐tailers) offer consumers both self‐run (i.e., reselling mode) and third‐party (i.e., agency selling mode) sales channels. However, previous research has not explained how consumers choose between these two channels and the potential moderating factors of that choice. To narrow this gap in the literature, we conducted a cognitive neuroscience‐based experiment and a scenario‐based experiment to investigate how the consumers' purchase intention is impacted by e‐commerce sales channels (self‐run vs. third‐party) and review volume (low vs. high). As per the results of the experiments, the participants were more likely to buy from the self‐run (vs. third‐party) channel when the review volume was low; however, they did not differ in their purchase intention between the self‐run and third‐party channels when the review volume was high (Studies 1 and 2). The neuroscience data yielded similar findings: When the review volume was low, the self‐run channel elicited more pronounced electroencephalography activity regarding the late positive potential (LPP) than the third‐party channel; when the review volume was high, there was no difference in the LPP induced by the two sales channels (Study 1). In addition, the interaction effect between sales channel and review volume on purchase intention was mediated by perceived product quality (Study 2). Based on these findings, we discussed the theoretical and practical implications of the research.

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Strategic Choice of Channel Structure in an Oligopoly

2012

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The traditional wisdom holds that the benefits of a decentralized channel structure arise from downstream competitive relationships. In contrast, Arya and Mittendorf (2007) showed that the value of decentralization can also arise from upstream interaction when the downstream firm conveys internal strife (decentralization) to an upstream external supplier. This paper extends the single firm centralization-decentralization choice model of Arya and Mittendorf (2007) to a strategic choice model in which all downstream competitors play a strategic centralization-decentralization game. We demonstrate that whether the main conclusions in the context of non-strategic choice of channel structure continue to hold when all firms play a centralization-decentralization game depends critically on the market structure of the upstream input market. Specifically, the conclusions are valid if all firms have exclusive upstream input suppliers but not so if the upstream input market is monopolized. Thus, whether the value of decentralization can arise from upstream interaction depends critically on the market structure of the upstream market.JEL Codes: L22, D21

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Store within a Store

Cited by 157 publications

References 30 publications

Agency Selling or Reselling? Channel Structures in Electronic Retailing

Agency Selling or Reselling? Channel Structures in Electronic Retailing

Effectiveness of self‐run vs. third‐party sales channels on the consumers' purchase intention: A multi‐method exploration of the moderating role of review volume

Strategic Choice of Channel Structure in an Oligopoly

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