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E-commerce as a stockpiling technology: Implications for consumer savings

Listed author(s):
  • Pozzi, Andrea

Shopping on the Internet spares customers the discomfort of carrying around heavy and bulky baskets of goods, since the service usually includes home delivery. 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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File URL: http://www.sciencedirect.com/science/article/pii/S0167718713000519
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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 31 (2013)
Issue (Month): 6 ()
Pages: 677-689

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Handle: RePEc:eee:indorg:v:31:y:2013:i:6:p:677-689
DOI: 10.1016/j.ijindorg.2013.05.005
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505551

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  1. 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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  7. Rachel Griffith & Ephraim Leibtag & Andrew Leicester & Aviv Nevo, 2009. "Consumer Shopping Behavior: How Much Do Consumers Save?," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 99-120, Spring.
  8. Erik Brynjolfsson & Yu (Jeffrey) Hu & Duncan Simester, 2011. "Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales," Management Science, INFORMS, vol. 57(8), pages 1373-1386, August.
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  14. repec:rje:randje:v:37:y:2006:3:p:543-561 is not listed on IDEAS
  15. Igal Hendel & Aviv Nevo, 2004. "Intertemporal Substitution and Storable Products," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 536-547, 04/05.
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