The pricing strategies of online grocery retailers
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11129_2023_Article_9273.pdf
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1.62 MB
Format
Adobe PDF
Checksum (MD5)
e73f23f7eacb17d26f7f86efa735b440
Author(s)
Aparicio, Diego
Metzman, Zachary
Rigobon, Roberto
Date Issued
November 28, 2023
Publisher
Springer US
Citation
Aparicio, Diego, Metzman, Zachary and Rigobon, Roberto. 2023. "The pricing strategies of online grocery retailers."
Version
Final published version
Abstract
This paper documents the differences in pricing strategies between online and offline (brick-and-mortar) channels. We collect price data for identical products from leading online grocery retailers in the United States and complement it with offline data for the same products from scanner data. Our findings reveal a consistent pattern: online retailers exhibit higher price dispersion than their offline counterparts. More specifically, online grocers employ price algorithms that amplify price discrimination in three key dimensions: (1) over time (through frequent price changes), (2) across locations (by charging varying prices based on delivery zipcodes), and (3) across sellers (by setting dispersed prices for identical products across rival retailers).
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution
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DOI of Published Version
https://doi.org/10.1007/s11129-023-09273-w
