Drivers of e‐retailer peak sales period price behavior: an empirical analysis

Abstract

PurposeElectronic markets are known to be distinct from, and more efficient than, the conventional retail markets. The purpose of this paper is to examine the effect on pricing in relation to proximity to a culturally and socially significant peak shopping day and the moderating effects of consumers product rating, product popularity, and featured product website rankings.Design/methodology/approachThe shopping season during the Thanksgiving holiday in 2010 was used to collect data for this study. This paper uses a case study approach by extracting real store‐level data from the web pages of a B2C e‐retailer. Store level data were downloaded for a total of 19 days, before and after “Black Friday.” The longitudinal data were analyzed using regression analytic procedure to conform the hypotheses.FindingsThe longitudinal data supported the hypothesized relationship between days to the culturally significant shopping event and e‐retailer selling price. The data also confirmed that featured product ranking is a significant moderator of the above relationship.Research limitations/implicationsIn e‐retailer websites, webpage ranking determines the order of display of products. Literature suggests that buyers choices are influenced by the volume and order of display of information. Therefore, this study includes webpage rankings of featured products, number of consumer reviews, and consumer ratings as independent variables. Another limitation of this study is that it uses data of one large e‐retailer. Future studies may address these limitations.Originality/valueThis paper examines the pricing behavior of e‐commerce companies during “culturally and socially significant” events. and answers research questions related to the electronic markets: Do e‐commerce companies participate in cultural and social events? How do these companies manipulate pricing during a special shopping season? How are search tools employed to showcase specific products to the buyers? Is there a relationship between proximity to “Black Friday” and product price, product popularity, and product ratings?