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E-commerce as a Stockpiling Technology - Implications for Consumer Savings

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  • Andrea Pozzi

    (EIEF)

Abstract

Shopping on the Internet spares customers the discomfort of carrying around heavy and bulky baskets of goods, since the service usually includes home de- livery. This makes e-commerce a technology well suited to helping consumers to buy in bulk or to stockpile items on discount. I use grocery scanner data provided by a supermarket chain selling both online and through traditional stores to show that the introduction of e-commerce leads to an increase in bulk purchase and stockpiling behavior by customers. Since bulk and discounted items are sold at a lower price per unit, my findings highlight a new dimension in which online shopping can be beneficial to consumers. According to my calculations, the reduction in the cost of stockpiling triggered by the introduction of electronic commerce generates significant savings.

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Bibliographic Info

Paper provided by Einaudi Institute for Economics and Finance (EIEF) in its series EIEF Working Papers Series with number 1308.

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Length: 39 pages
Date of creation: 2013
Date of revision: Mar 2013
Handle: RePEc:eie:wpaper:1308

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  1. Boizot, Christine & Robin, Jean-Marc & Visser, Michael, 2001. "The Demand for Food Products: An Analysis of Interpurchase Times and Purchased Quantities," Economic Journal, Royal Economic Society, vol. 111(470), pages 391-419, April.
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  12. Erik Brynjolfsson & Yu (Jeffrey) Hu & Michael D. Smith, 2003. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers," Management Science, INFORMS, vol. 49(11), pages 1580-1596, November.
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