Price Levels and Price Dispersion Within and Across Multiple Retailer Types: Further Evidence and Extension

In this article, the authors develop hypotheses on how prices and price dispersion compare among pure-play Internet, bricks-and-mortar (traditional), and bricks-and-clicks (multichannel) retailers and test them through an empirical analysis of data on the book and compact disc categories in Italy du...

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Bibliographic Details
Published in:Journal of the Academy of Marketing Science 2004-04, Vol.32 (2), p.176-187
Main Authors: Ancarani, Fabio, Shankar, Venkatesh
Format: Article
Language:English
Subjects:
Comparative analysis
Competition
Electronic commerce
Hypotheses
Internet
Marketing
Price levels
Price quotations
Pricing policies
Retail stores
Software
Standard deviation
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Summary:In this article, the authors develop hypotheses on how prices and price dispersion compare among pure-play Internet, bricks-and-mortar (traditional), and bricks-and-clicks (multichannel) retailers and test them through an empirical analysis of data on the book and compact disc categories in Italy during 2002. Their results, based on an analysis of 13,720 price quotes, show that when posted prices are considered, traditional retailers have the highest prices, followed by multichannel retailers, and pure-play e-tailers, in that order. However, when shipping costs are included, multichannel retailers have the highest prices, followed by pure-play e-tailers and traditional retailers, in that order. With regard to price dispersion, pure-play e-tailers have the highest range of prices, but the lowest standard deviation. Multichannel retailers have the highest standard deviation in prices with or without shipping costs. These findings suggest that online markets offer opportunities for retailers to differentiate within and across the retailer types. [PUBLICATION ABSTRACT]
ISSN:0092-0703
1552-7824
DOI:10.1177/0092070303261464