Planning Merchandising Decisions to Account for Regional and Product Assortment Differences

Dhruv Grewal (), Michael Levy, Anuj Mehrotra and Arun Sharma
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Dhruv Grewal: Babson College
Michael Levy: Babson College
Anuj Mehrotra: University of Miami
Arun Sharma: University of Miami

Chapter Chapter 15 in Data Envelopment Analysis, 2016, pp 469-490 from Springer

Abstract: Abstract The last decade has fundamentally changed the face of retailing. The genesis has been increased customer fragmentation, enabling technologies such as the internet and increased competition. In this era of “hypercompetition,” retailers need to have a better understanding of the performance of individual stores so they can more accurately plan their merchandise assortments and set more realistic merchandising goals. In this paper, we determine the performance of retail outlets relative to the “best practice” set of outlets and demonstrate the importance of accommodating both regional and assortment differences. We empirically assess the performance of stores from a major Fortune 500 multinational retailing chain. Multiple inputs and outputs from 59 stores in three regions were used to determine sales goals for two different product categories. The results of three alternative models suggest that incorporating both assortment and regional differences significantly affects both performance and predicted sales volume estimates. Implications and avenues for future research are discussed.

Keywords: Retailing; Merchandise assortment; Store efficiency; Assortment (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/978-1-4899-7684-0_15

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