Decision Support Systems - Special issue on economics of electronic commerce
Coordinating Clearance Markdown Sales of Seasonal Products in Retail Chains
Operations Research
Combined Pricing and Inventory Control Under Uncertainty
Operations Research
Multilocation Combined Pricing and Inventory Control
Manufacturing & Service Operations Management
Dynamic pricing of seasonal goods with spot and forward purchase demands
Computers & Mathematics with Applications
Dynamic ordering and pricing for a perishable goods supply chain
Computers and Industrial Engineering
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Advancement in information technology has opened new avenues for traditional retailers to expand their operations. Pricing, which has been a critical issue, is more important than ever before as traditional retailers pursue multi-channel sales. In this paper the author studies the pricing problem of a retailer selling a seasonal product simultaneously in a 'brick and mortar' store as well as online. Optimal prices are derived and different product-market conditions are determined under which different combinations of channel adoptions are profitable for the retailer. Impact of various factors such as consumers channel preference, seasonality of the product and additional off-line holding and displaying costs on the optimal prices and profits are examined to provide critical managerial insights. Their results indicate that more "seasonal" a product more is the relative efficiency of the online channel. The author also finds that even if the market strongly favors the 'bricks and mortar' store, the profits for the retailer are boosted if the online shopping preference for the customer population are positively influenced. The author's analysis also demonstrates that inter-channel and inter-temporal discounts increase as the seasonality of the product increases.