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A Decision Model for E-commerce-enabled Partial Market Exit

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  • Syam, Siddhartha
  • Bhatnagar, Amit

Abstract

Struggling retail chains often try to recover profitability by closing some of their stores. The challenge in this strategy lies in determining how many stores to close, as store exit has implications for both the customers and the supply chain. After a store closes, its customers are lost forever to the competition, unless there is a surviving open store nearby or an electronic alternative such as an e-store. From the supply chain perspective, after a store closes, its supporting regional distribution center is left with less business, and thus reduced viability. This paper develops a decision support model to study the profitability of alternative retail network structures by varying the proportion of stores that are closed, the average price sensitivity of demand, the price difference between the online store and the traditional retailers, and customer retention rates.

Suggested Citation

  • Syam, Siddhartha & Bhatnagar, Amit, 2010. "A Decision Model for E-commerce-enabled Partial Market Exit," Journal of Retailing, Elsevier, vol. 86(4), pages 401-413.
    • Handle: RePEc:eee:jouret:v:86:y:2010:i:4:p:401-413
    DOI: 10.1016/j.jretai.2010.05.001
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    References listed on IDEAS

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    Cited by:

    1. Fen Wang & Manuel Mora & Mahesh S. Raisinghani, 2015. "Web-Based Decision Support for E-Business Strategies: A Balanced Scorecard Approach," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 14(03), pages 455-479.
    2. Suryandari, Retno Tanding & Paswan, Audhesh K., 2014. "Online customer service and retail type-product congruence," Journal of Retailing and Consumer Services, Elsevier, vol. 21(1), pages 69-76.
    3. Feng, Cong & Fay, Scott, 2020. "Store Closings and Retailer Profitability: A Contingency Perspective," Journal of Retailing, Elsevier, vol. 96(3), pages 411-433.

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