The digitalisation of retailing
Retailing is going through a comprehensive restructuring process where e-commerce is growing and taking market shares from traditional retailing. The digitalisation of retailing also means that international players are increasingly competing with local retailers and retail chains. Today, consumers can quickly find the lowest price for a large number of products via price comparison websites, as well as get information about available retailers, delivery times, shipping costs, etc. This development has reduced consumer search costs and thereby changed the competitive environment for the physical stores.
One of the priority research areas at the Institute of Retail Economics is the digitalisation of retailing, where we do research to understand the consequences of this development. Among other things, we analyse whether physical stores can develop their store environment to adapt to the increasing competition in the market. We have in a number of field experiments, for example, analysed whether traditional stores can work with new music solutions to make their marketplace more attractive and thereby increase sales (read more here).
In an on-going project, we analyse how the increased use of price comparison websites has affected pricing and consumer choice. We are here studying if price comparison websites have led to lower prices and margins for retailers, if we can observe price convergence for homogeneous goods, if pure e-tailers use different pricing models than traditional retailers, and what information on the price comparison websites that creates traffic to the e-tailers own websites.