Measuring the Effect of Queues on Customer Purchases

Yina Lu (), Andrés Musalem (), Marcelo Olivares () and Ariel Schilkrut ()
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Yina Lu: Decision, Risk, and Operations Division, Columbia Business School, Columbia University, New York, New York 10027
Andrés Musalem: Fuqua School of Business, Duke University, Durham, North Carolina 27708
Marcelo Olivares: Decision, Risk, and Operations Division, Columbia Business School, Columbia University, New York, New York 10027; and Department of Industrial Engineering, University of Chile, Santiago, Chile 8370439
Ariel Schilkrut: SCOPIX, Burlingame, California 94010

Management Science, 2013, vol. 59, issue 8, 1743-1763

Abstract: We conduct an empirical study to analyze how waiting in queue in the context of a retail store affects customers' purchasing behavior. Our methodology combines a novel data set with periodic information about the queuing system (collected via video recognition technology) with point-of-sales data. We find that waiting in queue has a nonlinear impact on purchase incidence and that customers appear to focus mostly on the length of the queue, without adjusting enough for the speed at which the line moves. An implication of this finding is that pooling multiple queues into a single queue may increase the length of the queue observed by customers and thereby lead to lower revenues. We also find that customers' sensitivity to waiting is heterogeneous and negatively correlated with price sensitivity, which has important implications for pricing in a multiproduct category subject to congestion effects. This paper was accepted by Martin Lariviere, operations management.

Keywords: queuing; service operations; retail; choice modeling; empirical operations management; operations/marketing interface; Bayesian estimation; service quality (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (52)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:59:y:2013:i:8:p:1743-1763

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