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Here Today, Discounted Tomorrow: Strategic Shoppers Know When to Buy, and at What Price

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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Some shoppers just can’t help themselves and buy mostly on impulse without regard to price. Others are die-hard bargain hunters, who only open their wallets for a discount. Then there are the strategic consumers, who are willing to buy full-price sometimes, but at other times they will wait for a bargain. According to new Wharton research, it’s these customers that retailers need to focus on in order to reap the full benefits of lean retail inventory management and variable pricing. In a paper titled, “ Purchasing, Pricing and Quick Response in the Presence of Strategic Consumers ,” Gérard P. Cachon , professor of operations and information management at Wharton, and doctoral student Robert Swinney show how lean inventory systems are far more effective than initially thought in helping retailers determine the ideal size of their orders and the best markdown strategies when taking strategic buyers into account.…

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