With the increasingly uncertain future of brick-and-mortar (B&M) retailing, companies are exploring new ways to avoid the high costs associated with maintaining traditional, full-service retail stores. One solution, pop-up stores, has gained popularity in recent years. This paper uses empirical evidence from a leading U.S. retailer to examine the value of pop-up retailing. Specifically, we focus on pop-up stores operated by a traditional multichannel retailer over 3 years and examine their impact on customer demand and order fulfillment in the short run and long run. We further evaluate whether the impact of a pop-up store is sensitive to its operational terms, including whether it is a first-time or returning "pop-up" to a market region and the duration of the store. Using a quasi-field experiment, we find that having pop-up stores leads to an expansion in the overall demand during and after operations, indicating a spillover effect that extends beyond a pop-up store's limited operational window. From an operational perspective, our empirical evidence suggests that customers migrate from the online channel to pop-up stores for faster demand fulfillment. Moreover, recurring pop-up stores are slightly less effective at stimulating local demand than first-time pop-up stores. Finally, results reveal that pop-up stores are not as effective as permanent stores in generating demand; however, the flexibility in operations still makes pop-up stores an attractive physical retail format, especially for exploring markets with modest potential.

As more firms look to implement omnichannel strategies to mitigate the inherent information barriers between online and offline channels, understanding the outcomes of these initiatives is critical. This study empirically examines the impact of the decision to share brick-and-mortar (B&M) store product availability information with customers, specifically focusing on the scenario where a discrepancy exists in the product assortment of online and offline channels. We investigate the impact of this information sharing strategy on customer research shopping trajectories using a proprietary dataset collected from a leading North American retailer. Using a difference-in-differences approach, we find that this strategy helps boost the overall sales from customers who reside within the trade area of a retail store. At the channel level, the policy induces customers to migrate from the B&M channel to the online channel after learning that the product selection offered at their local retail store may not meet their needs, resulting in a significant increase in online sales, but a slight decrease in B&M sales. From an operational perspective, our empirical evidence suggests that sharing retail store product availability information leads to more customers using the expedited shipping service when shopping online. Furthermore, we also discover a slight increase in the overall return rate. We conclude by providing managerial implications on the functionality of the online and B&M channels and how retailers can coordinate services offered by both channels to improve the utility customers receive from the brand.

Larger product assortments have been found to have both positive and negative impacts on firms that offer them. More product variety allows firms to increase sales by either selling to a larger customer base or by encouraging current customers to purchase more frequently and in greater quantities. However, more product variety is also associated with lower operational performance. In this research, we investigate the impact of product variety on firm performance in a retail setting. Using data gathered from a large retailer over a 32-week period for 12 product categories, we develop a multiple stage regression model and find that the effects of product variety on inventory levels, stockout rates and sales differ across more hedonic and more utilitarian product categories. Furthermore, we find that the product variety decision itself is moderated by the hedonic or utilitarian nature of the product category. Implications of the findings for theory and retail management are discussed.

This study examines how a passenger's operational exposure and value-of-time moderate the relationship between airline quality and passenger choice. Using a choice model, we show that the positive impact of providing nonstop flights and higher on-time performance is enforced by a passenger's exposure to airline operations, and high time value. In particular, the results show that segmenting passengers by their operational exposure may generate demand, even in a fairly standardized service operations industry, such as the airline industry. Finally, we discuss potential ways that airlines can discriminate the quality or the price of services provided based on our findings. (C) 2017 Elsevier Ltd. All rights reserved.

Managing product variety has long been a concern for firms from many different industries, with less product variety typically associated with higher operational performance. However, most contemporary research on product variety has looked at its impacts on the operations and sales performance of manufacturing firms. In this research, we investigate the impact of product variety on the operational performance at a retail setting. The distinction between retailer and manufacturer is important because of the unique product assortment issues retailers face, such as selling competing brands, offering many different types of product categories, or product substitutability. Using data gathered over a 7-month period for two product categories, we develop econometric models and find that product variety has a positive effect on inventory levels, and that this impact is moderated by product category substitutability. We also find that product variety increases product availability in product categories that are more substitutable, with a 1% increase in product variety leading to 0.67% fewer stockouts in some product categories. Our findings suggest both a positive and negative impact of product variety on operational performance.

This article conceptually and empirically examines sourcing of food aid, comparing the approaches promoted by the United States with those of the United Nations (UN) and the European Union (EU). In the recipient country approach (RCA) promoted by the United Nations and the European Union, transaction cost economics (TCE) suggests that RCA provides faster aid with fewer transaction costs. In the donor country approach (DCA) practiced by the United States, the resource-based view (RBV) suggests that the superior resources of a donor country assure a higher quality, safer, and plentiful food supply. Using a comparative case analysis with data provided by the United States Agency for International Development (USAID), we provide evidence that RCA and DCA as practiced in reality are both suboptimal. Improved sourcing and transportation options computed through quantitative methods can offer significant benefits over both approaches. We propose a contingency approach that reduces landed costs of food aid by giving governmental relief organizations more flexibility in RCA versus DCA sourcing, which can be justified by resource dependency theory (RDT). Our findings contribute to the decision-making and policy discussion about the efficiency of governmental food-aid programs.

Purpose – The purpose of this paper is to propose that transportation modal mix in global supply chains is a result of the strategic alignment between industry characteristics and supply chain strategies. Design/methodology/approach – Using annual US trade statistics and manufacturing industry data for the years 2002-2009 between the USA and its top 12 Asian trading partners, this study applies various regression methods to examine key factors associated with the transport modal decision. Findings – The results show that industry characteristics have an impact on the transportation modal mix in global supply chains. Manufacturing industries use more air freight and less ocean freight when facing positive sales surprises, high-monthly demand variation, a high-contribution margin ratio, a high cost of capital, and increased competition. Practical implications – The findings provide important insights for logistics managers and freight forwarders. While transportation cost remains an important concern, a logistics manager must also consider non-cost factors such as competition, working capital, and demand uncertainties in their modal decisions. Freight forwarders should be supply chain solution providers who consider all of these industry factors and suggest a proper mix of transportation modes for their customers. Originality/value – This study is among the first efforts to examine the impact of industry characteristics on the transportation modal mix in global supply chains. This study first develops a theoretical framework for the modal choice decision for international transportation movements and then, using an extensive and innovative data set, provides new findings regarding current air freight practices in global supply chains.

Previous research has shown that low-cost carriers (LCCs) may stimulate traffic at an airport by offering low fares. Using passenger survey data from the Washington-Baltimore region's three airports, we find that the benefits of LCCs to airports extend beyond the traffic generated directly by the LCCs through their low fares. In addition, we find that the mere presence of an LCC at an airport can attract passengers, even to competing carriers. These "halo effects" from LCC presence increase the significance to airport managers of attracting LCCs in order to generate passenger demand. (C) 2015 Elsevier Ltd. All rights reserved.

This article examines the demand for US domestic airline passenger transportation as it pertains to short-haul markets of 500 miles or less, and compares it to the demand in long-haul markets of longer than 500 miles. We investigate how a variety of factors impact passenger volumes, depending on route distance, using a panel set of quarterly data from 1995 to 2010. We find that changes in security screening times, price differences between air travel and automobile travel, and market concentration levels affect short-haul and long-haul markets in statistically different ways, while the impact of low-cost carriers on passenger volumes affects both markets identically.

Previous research has indicated that liberal air services agreements (ASAs) lead to more passengers. Using time-series regression models, this study extends those findings by looking more closely at the evolving ASAs between the United States and China during 1996–2009. Our results indicate that while liberal ASAs generally lead to increased passengers, the extent of this impact depends on the general state of liberalization when the agreement is signed. In addition, this study shows that the benefits of liberalization may not be evenly apportioned between the two countries of carriers.

The US–Canadian air traffic market is one of the largest international markets in the world – estimated at 23 million passengers in 2008. The market is currently regulated by an "Open Skies" agreement, which eliminated all restrictions on the frequency of flights, the aircraft flown, and the fares charged on transborder routes. Although there is evidence that consumers have benefited from the Open Skies agreement, there is also evidence that many passengers have chosen to avoid transborder services, and instead fly from airports in US border cities and cross the border by surface transportation. This paper uses a passenger demand model to determine the scope of this "leakage" from transborder routes. In addition, transborder airfares are compared to US domestic airfares to determine whether transborder fares are "excessive", a potential cause of the leakage. Results show a substantial amount of leakage estimated at over 4.7 million passengers for 2008. Furthermore, after controlling for the impact of route-specific variables, such as market concentration, average fares are 28.2% higher in the transborder market. Finally, policy implications and the future of the transborder air passenger market are discussed.

When there is only one airport in the origin and destination cities of a given route market, the assessment of level of competition in an airline route market can be straightforward. The presence of more than one airport at the origin or destination cities, however, makes the measurement of route competition much more difficult. This research measures competition at both the airport pair and city pair levels to empirically separate the impacts of direct and adjacent competition on yields in multi-airport cities. The analysis of a large panel data set from the US airline industry reveals that airport pairs within a metropolitan area appear to be effective yet imperfect substitutes. That is, while competition at adjacent airport pairs does have significant effect on fares in a focal airport pair market, this effect is found to be markedly smaller than that of added competition in the focal airport-to-airport route market. In addition, the effects of airport location relative to the population epicenter, the extent of airport congestion, and a carrier's strategic type on yields and passenger demand are assessed. Implications for policymakers and managers are discussed and directions for future research are provided.

When there is only one airport in the origin and destination cities of a given route market, the assessment of level of competition in an airline route market can be straightforward. The presence of more than one airport at the origin or destination cities, however, makes the measurement of route competition much more diffi cult. This research measures competition at both the airport pair and city pair levels to empirically separate the impacts of direct and adjacent competition on yields in multi-airport cities. The analysis of a large panel data set from the US airline industry reveals that airport pairs within a metropolitan area appear to be effective yet imperfect substitutes. That is, while competition at adjacent airport pairs does have signifi cant effect on fares in a focal airport pair market, this effect is found to be markedly smaller than that of added competition in the focal airport-to-airport route market. In addition, the effects of airport location relative to the population epicenter, the extent of airport congestion, and a carrier’s strategic type on yields and passenger demand are assessed. Implications for policymakers and managers are discussed and directions for future research are provided.

Traditional analysis of multi-point competition suggests that firms compete less intensely with one another when they have strategic contacts across multiple markets. However, this mutual forbearance argument has not incorporated production cost differences between firms as moderating factors. Based on the US domestic air travel data, we find that the collusion-facilitating effects (as measured by airfare increases) from multi-market contact hold when multi-market contact occurs among carriers with either uniformly low costs or uniformly high costs, although, in some cases, carrier pricing is also influenced by multi-market contact between airlines with different cost structures.

This paper analyzes the implementation of transshipments among competing firms and the impact of transshipments on their inventory replenishment decisions. Previous studies have shown that transshipments, when implemented between stocking locations operating in the same echelon, improve firm financial performance and customer service through risk sharing and inventory reallocation. However, these studies have not investigated transshipments in a competitive environment; that is an environment where two firms both cooperate through transshipments and compete for customers. In this paper, the rivalry intensity between firms is assessed through a variable, customer's switching rate, measuring the percentage of consumers switching sellers in the event of a stockout. The impact of various switching rates on the performance benefits from transshipments is investigated, leading to several important managerial implications. In particular, numerical analyses suggest that transshipment price plays a unique, crucial role in creating benefits for participating firms with asymmetric market demands and various degrees of customer loyalty.