with Cenk Kocas, and Jonathan D. Bohlmann. ” Journal of Interactive Marketing 41, 2018, 28-43.
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Abstract:
Among the many items online retailers sell, some stand out as best sellers and are often sold at considerable discounts. Bestseller discounting 10 can encourage customer traffic and the purchase of a basket of other products in the same transaction. Although most studies treat retailers as 11 symmetric, the cross-selling potential is generally asymmetric across retailers, since some online retailers have more products to sell. In addition, 12 the cross selling effect works both ways — customers intending to buy a best-seller may buy other items in their shopping basket, while other 13 customers intending to buy a basket may buy a best-seller while visiting the retailer. The authors model the pricing implications of this rich variety 14 of asymmetric cross-selling, with both best sellers and typical baskets acting as traffic generators and cross-sold products. The common wisdom 15 that loss leader pricing leads to neither a significant increase in-store traffic nor an increase in profits does not apply in an asymmetric case where 16 one retailer has more products to cross-sell. The cross-selling potential of products even far down the bestseller list is demonstrated. Empirical 17 analyses provide support for key findings of the theoretical model using book pricing and sales rank data from multiple online retailers.
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