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Price Differentiation in Online and Offline Retail: An Empirical Study of Current Practices

Author

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  • Kiczmachowska Ewa E.

    (Kozminski University, Jagiellońska 57 Street, 03-301 Warszawa Poland)

  • de Pourbaix Paweł

    (Kozminski University, Jagiellońska 57 Street, 03-301 Warszawa Poland)

  • Jemielniak Dariusz

    (Kozminski University, Jagiellońska 57 Street, 03-301 Warszawa Poland)

Abstract

The purpose of this article is to present the practice of price differentiation in multichannel sales conditions. The study reviews the literature on channel pricing policy. The authors set a goal to study the practices of retailers operating in online and offline channels in Poland in terms of price differentiation between channels. Using the example of the EMPIK and SMYK chains, price differences between online and offline channels were analysed for several 100 products in key categories for these retailers. The prices were obtained by scraping the data from the websites of both retailers in November 2022. Statistical analysis was designed to examine differences in pricing by product category, position on the “most frequently purchased” list and price range. This research confirmed previous results that online vs. offline price differentiation was not widely used by leading multichannel retailers in the most popular categories bought online: only two out of 12 retailers elicited for the study were found to perform it. It also confirmed previous findings that if price differentiation was applied, the items were cheaper online more often. However, the average depth of discount was considerably higher. Apart from these general findings, our research delivered detailed insights at the category level as the depth of discount and the share of products sold at a discount online considerably differed between categories with comparable and non-comparable offers. Additionally, this study provided a unique analysis of the multichannel price differentiation strategy in relation to popularity or the absolute price of the product. While in the case of the popularity of the product, the offer uniqueness seemed to play a role, the relation to the absolute price of the product showed a mixed picture and would need further investigation.

Suggested Citation

  • Kiczmachowska Ewa E. & de Pourbaix Paweł & Jemielniak Dariusz, 2023. "Price Differentiation in Online and Offline Retail: An Empirical Study of Current Practices," Marketing of Scientific and Research Organizations, Sciendo, vol. 48(2), pages 1-16, June.
    • Handle: RePEc:vrs:mosaro:v:28:y:2023:i:2:p:1-16:n:3
    DOI: 10.2478/minib-2023-0007
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    References listed on IDEAS

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    1. Alberto Cavallo, 2017. "Are Online and Offline Prices Similar? Evidence from Large Multi-channel Retailers," American Economic Review, American Economic Association, vol. 107(1), pages 283-303, January.
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    More about this item

    Keywords

    online retail; offline retail; price differentiation; price discriminatio; handel detaliczny on-line/off-line; różnicowanie cen;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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