Unlimited shelf space in Internet supply chains: Treasure trove or wasteland?

Elliot Rabinovich, Rajiv Sinha, Timothy Laseter

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

Internet retailing offers merchants limitless shelf space. This has led experts to highlight the existence of a "long tail" of offerings on the web and assert that the future of online business is "selling less of more." However, it is difficult for Internet retailers of physical goods to sell a large scope of products without having to handle potentially large amounts of product returns from customers. This is due to the fact that customers can and do get overwhelmed by excessive product variety and often make erroneous purchasing decisions. We shed light on this issue through an assessment of theoretical predictions based on data from sales and returns of almost 7000 products in a particular product category. While retailers can benefit from expanding the scope of their inventories to generate Internet sales, the success of this strategy will depend on the control of unjustified product returns by consumers and the management of recurrent execution errors and product fit failures in transactions with customers. Furthermore, from our results, the gains that this strategy will bring to retailers will be bound by the amount of time products have been available on the Internet retailer's site, as well as by other attributes such as product price and size.

Original languageEnglish (US)
Pages (from-to)305-317
Number of pages13
JournalJournal of Operations Management
Volume29
Issue number4
DOIs
StatePublished - May 2011

Fingerprint

Supply chains
Internet
Sales
Purchasing
Byproducts
Shelf space
Supply chain
World Wide Web
Retailers
Industry
Product returns

Keywords

  • E-commerce
  • Empirical study
  • Marketing-operations interface

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering
  • Computer Science Applications
  • Management Science and Operations Research
  • Strategy and Management

Cite this

Unlimited shelf space in Internet supply chains : Treasure trove or wasteland? / Rabinovich, Elliot; Sinha, Rajiv; Laseter, Timothy.

In: Journal of Operations Management, Vol. 29, No. 4, 05.2011, p. 305-317.

Research output: Contribution to journalArticle

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