Exploring the significance of digital disruption on the Finnish grocery industry: A case study on the current attitudes of Finnish grocery suppliers, retailers and consumers towards online grocery retail.

Since its inception, digitalization has been disrupting numerous industries around the world. This also includes the grocery trade: Online channels have given consumers more flexibility in regard to how and when they purchase the products that fuel their every-day lives. This transformation has challenged grocery suppliers and retailers to adapt their internal tools and processes, while reevaluating their strategic interpretation of the future of their industry. Although online commerce is often referred to as the superior retail channel of today, the share of online grocery – also referred to as e-grocery – has grown relatively slowly in Finland. The reasons for this are still fairly unknown: some suggest it may be due to the local oligopolistic parties not wanting to deter consumer cashflow from their brick-and-mortars, while others believe it may be due to a wary approach from Finnish consumers. Nevertheless, in the recent years the growth rate of Finnish e-grocery has increased notably. This sparks an interesting question: Has the era of e-grocery shopping finally arrived? Through a qualitative intense single-case analysis, this study complements existing research by exploring the significance of digital disruption on the unique setting of Finnish grocery through 20 interviews with suppliers, retailers and consumers. The aim of this study is to explore the current e-grocery related attitudes of key players in the grocery supply chain to better understand the factors behind digital grocery’s slow progression, as well as how large a role online channels may have in Finland’s traditionally concentrated grocery market in the future. The study’s findings agree as well as add to existing research in regard to the plethora of digitalization related benefits and potential challenges felt by grocery suppliers, retailers and their consumers. The gathered insights suggest that the progress of Finnish e-grocery has been limited by both supply and demand related factors. However, through the offered practical implications centered around corporate agility, shopper data -led collaboration as well the improving of service design in digital channels, this study implies that Finnish suppliers and retailers have the opportunity to maximize the potential of their digital channels, thus being able to better serve the modern as well as impending demands of Finnish grocery shoppers

Inferring Individual Preferences And Latent Behavioral Factors With Incomplete Information

This dissertation extends prior research on inferring individual preferences from the following two aspects: one is to examine important latent behavioral factors affecting consumers\u27 consumption decisions; the other is to overcome the challenges arising from incomplete information. Regarding latent behavioral factors, this dissertation considers the following two aspects: (1) three types of intragroup dynamics behavior, and (2) variety-seeking behavior. Regarding incomplete information, this dissertation focuses on two types of incomplete information: individual\u27s behavior and identity, and order of consumption. Specifically, Chapter 2 presents a method to infer heterogeneous individual preferences and three components of intragroup dynamics using just aggregate and de-identified data. Chapter 3 emphasizes the effect of consumption outcomes on an individual\u27s propensity for variety-seeking when the order of consumption is unobserved. To overcome the challenges arising from incomplete information, this dissertation develops advanced individual-level Bayesian models and uses two-step iterative algorithms to estimate the proposed models in an MCMC framework. In-depth simulation studies show that the parameters are well recovered, suggesting that the proposed models are identified. Furthermore, this dissertation shows that ignoring latent behavioral factors may lead to biased estimation of individual preferences, which could result in many consequences. This dissertation applies the proposed methods to two empirical settings: an individual-level TV viewing and targeted TV advertising setting using Nielsen People Meter (NPM) data, and an online video game environment. In the TV viewing setting, it is shown that the proposed method could significantly improve the efficiency of TV ad targeting through counterfactual analysis. In the video-game environment, results show that although there is extensive heterogeneity, on average, positive consumption outcomes lead to inertial preferences, while negative consumption outcomes lead to variety-seeking. In sum, this dissertation shows the importance to incorporate important latent behavioral factors in inferring heterogeneous individual preferences especially when data are incomplete, and proposes innovative methods to overcome the challenges emerging from incomplete information

An Empirical Investigation of the Existence and Causes of Noticeable Price Difference in Multi-Channel Retailers

Pricing strategy is one of the greatest difficulties facing multi-channel retailers (Gupta, Ting & Tiwari, 2019) as many retailers have switched to a multiple channel system (Ailawadi & Farris, 2017). Retailers are using their price strategies to encourage consumers to use either online or offline channels. Therefore, in many cases retailers want consumers to notice the price difference between channels. However, in some circumstances, retailers do not want consumers to notice the differentiation. Therefore, this thesis will answer two main research questions: How should optimal pricing be set for multiple channels that will make consumers more/less likely to notice price differentiation? What types of price presentation format are more/less likely to make consumers notice price differentiation? Prior investigations have studied noticeable price differences by using differential price thresholds in a single channel (e.g., Cheng & Monroe, 2013a; Sirvanci, 1993) rather than studying differential price thresholds for a single product when there is one retailer and two channels. Multi-channel retailers use different monetary and non-monetary promotions as price presentation formats. Previous researchers have studied the roles of monetary and non-monetary promotions in the price-framing effect. However, so far no study has investigated the price effect of different promotion presentation formats on noticing differentiation. This thesis integrates just noticeable difference theory and prospect theory to investigate consumers’ ability to notice price differentiation in different price presentation formats. It does so by conducting two experimental studies, each with 720 participants. It investigates the antecedent factors that influence the noticing of price differentiation in multiple channels. The results of the thesis have important implications for the multi-channel literature and for managerial practice. They show that consumers are more likely to notice price differentiation when the difference between the (online and offline) regular prices is 20%. The results also suggest that there is a difference in noticing price differentiation in different monetary promotional formats. The thesis can guide marketing managers to set optimal prices for single products when there is one retailer and two channels. They can decide whether to use the same price in both channels or different prices in the different channels depending on whether their strategy is to attract consumers and increase purchase intentions by making the price difference noticeable or not