Research Seminar
Seminar: Assortment Rotation and the Value of Concealment
| Abstract: | Assortment rotation -- the retailing practice of changing the assortment of products offered to customers -- has recently been used as a competitive advantage for both brick-and-mortar and online retailers. We focus on product categories where consumers typically purchase multiple products during a season and investigate a new reason why frequent assortment rotations can be valuable to a retailer. Namely, by distributing its seasonal catalog of products over multiple assortments rotated throughout the season -- as opposed to selling all products in a single assortment -- the retailer effectively conceals a portion of its full product catalog from consumers, injecting uncertainty into the consumer's relative product valuations. Rationally-acting consumers may respond to this additional uncertainty by purchasing more products, thereby generating additional sales for the retailer. We refer to this phenomenon as the value of concealment. We develop a consumer choice model and finite-horizon stochastic dynamic program to study the value of concealment. We show that when consumers are myopic, the value of concealment is generally positive. In contrast, we show that when consumers are strategic, the value of concealment is context-dependent; we present insights and discuss intuition regarding which product categories likely lead to positive vs. negative values of concealment. |
| Date: | Mar 23 (Fri), 2018 11:00 am - 12:15 pm |
| Time: | 11:00AM - 12:15PM |
| Speaker: |
Dr. Joel GOH National University of Singapore |
| Venue: | Room 7-208, 7/F, Lau Ming Wai Academic Building |
+852 3442-8989
+852 3442-0151
