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A multi-category demand model incorporating inter-product proximity

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  • Ma, Yu
  • Seetharaman, P.B. (Seethu)
  • Singh, Vishal

Abstract

Grocery stores typically contain hundreds of product categories. Physically arranging these product categories among a limited number of store aisles and shelves is a challenging task. We propose a multi-category demand model that considers physical locations of product categories to be important determinants of consumers’ purchase incidence decisions in these categories at the store, and examine two issues: (1) to what extent does store layout influence shopping basket decisions? (2) how should the store layout be re-designed to achieve optimal profit? Our analyses suggest the retailer can significantly increase store profitability by re-organizing retail layout configurations.

Suggested Citation

  • Ma, Yu & Seetharaman, P.B. (Seethu) & Singh, Vishal, 2021. "A multi-category demand model incorporating inter-product proximity," Journal of Business Research, Elsevier, vol. 124(C), pages 152-162.
    • Handle: RePEc:eee:jbrese:v:124:y:2021:i:c:p:152-162
    DOI: 10.1016/j.jbusres.2020.11.036
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    References listed on IDEAS

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