Constructing a Sustainable and Dynamic Promotion Model for Fresh Foods Based on a Digital Transformation Framework

Tsung-Yin Ou, Guan-Yu Lin, Chin-Ying Liu and Wen-Lung Tsai
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Tsung-Yin Ou: Department of Marketing and Distribution Management, National Kaohsiung University of Science and Technology, Kaohsiung 824, Taiwan
Guan-Yu Lin: College of Management, National Kaohsiung University of Science and Technology, Kaohsiung 824, Taiwan
Chin-Ying Liu: Department of Marketing and Distribution Management, National Kaohsiung University of Science and Technology, Kaohsiung 824, Taiwan
Wen-Lung Tsai: Department of Information Management, Asia Eastern University of Science and Technology, New Taipei 220, Taiwan

Sustainability, 2021, vol. 13, issue 19, 1-19

Abstract: The emergence of digital technology has compelled the retail industry to develop innovative and sustainable business models to predict and respond to consumer behavior. However, most enterprises are crippled with doubt, lacking frameworks and methods for moving forward. This study establishes a five-step decision-making framework for digital transformation in the retail industry and verifies it using real data from convenience stores in Taiwan. Data from residential type and cultural and educational type convenience stores, which together account for 75% of all stores, underwent a one-year simulation analysis according to the following three decision models for promotions: the shelf-life extended scrap model (SES), the fixed remaining duration model (FRD), and the dynamic promotion decision model (DPD). The results indicated that the DPD model reduced scrap in residential type stores by 12.88% and increased profit by 15.43%. In cultural and educational stores, the DPD model reduced scrap by 10.78% and increased profit by 7.63%. The implementation of the DPD model in convenience stores can bring additional revenue to operators, and at the same time address the problem of food waste. With the full use of resources, sustainable operation can be turned into a concrete and feasible management decision-making plan.

Keywords: digital transformation; convenience stores; fresh foods; dynamic promotion decision model; simulation analysis; sustainable business model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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