Nav: Home

More is better when it comes to online product selection

August 01, 2016

Before online shopping, if a store didn't carry the item you wanted it could take days or weeks to get it, if the store would even make a special order. That was then. Now, there's no reason for retailers not to take advantage of the unlimited retail space online and offer everything they sell. Recent research supports this approach: the more products offered online, the greater the revenue for the retailer.

In "Does Greater Online Assortment Pay? An Empirical Study Using Matched Online and Catalog Shoppers," forthcoming in the September issue of the Journal of Retailing, Junzhao Ma, a lecturer in the marketing department at Australia's Monash University, investigates how a larger selection of products available online affects consumer spending, using data from a large US retailer that specializes in apparel and offers both printed catalog and Internet shopping. In particular, he examines the effect on the retailer's main products, offered in the catalogs and for which there is high demand, and the less-popular niche items that were available on the retailer's website but hard to find in its catalogs.

Ma found that online shoppers spent significantly more than catalog shoppers on both popular and low-demand products -- almost 11 percent more per customer per year on the main offerings and 250 percent more on the hard-to-find niche items. Catalog shoppers spent only 2.5 percent of their total on niche items, yet the category accounted for 8.4 percent of the total spending of online shoppers.

Overall, customers spend more online because it's easier to locate items through the search function, the author suggests, especially the less mainstream items. Product line managers can benefit from this information, he writes: "Low-selling (niche) products are regularly pruned from the product line to reduce operational complexity and corresponding cost...but as shoppers grow more accustomed to the idea of searching for niche items online, carrying these niche products can not only yield additional revenue but also help retailers recruit and retain customers."
-end-


Journal of Retailing at New York University

Related Retailers Articles:

Study shows gun shops can aid in preventing suicides
Firearm retailers throughout Washington are willing to learn about suicide prevention but are reluctant to talk to customers about mental health issues, according to a new study by Forefront Suicide Prevention at the University of Washington.
Bad marketing encourages consumers to opt for lower quality products
A new framework to enable retailers to better position their products to consumers has been devised by Tamer Boyaci and Frank Huettner at ESMT Berlin together with Yalcin Akcay from Melbourne Business School.
Does live tweeting while watching TV distract from the ads?
Researchers from the Kelley School of Business at Indiana University and at Goizueta Business School at Emory University published new research in the INFORMS journal Marketing Science which reveals that advertisers can see a boost in online shopping when television viewers multitask and engage in social media activity while watching certain programs.
Seafood mislabelling persistent throughout supply chain, study finds
Researchers examined 203 samples from 12 key targeted species collected from various importers, processing plants and retailers in Ontario.
The hidden treasure of digital piracy? Can boost bottom line for manufacturers, retailers
Research analysis finds that a moderate level of piracy can have a positive impact on the bottom line for both the manufacturer and the retailer -- and not at the expense of consumers.
More Retailers News and Retailers Current Events

Best Science Podcasts 2019

We have hand picked the best science podcasts for 2019. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

Rethinking Anger
Anger is universal and complex: it can be quiet, festering, justified, vengeful, and destructive. This hour, TED speakers explore the many sides of anger, why we need it, and who's allowed to feel it. Guests include psychologists Ryan Martin and Russell Kolts, writer Soraya Chemaly, former talk radio host Lisa Fritsch, and business professor Dan Moshavi.
Now Playing: Science for the People

#537 Science Journalism, Hold the Hype
Everyone's seen a piece of science getting over-exaggerated in the media. Most people would be quick to blame journalists and big media for getting in wrong. In many cases, you'd be right. But there's other sources of hype in science journalism. and one of them can be found in the humble, and little-known press release. We're talking with Chris Chambers about doing science about science journalism, and where the hype creeps in. Related links: The association between exaggeration in health related science news and academic press releases: retrospective observational study Claims of causality in health news: a randomised trial This...