RETAIL OPERATIONS, CONSUMER STOCKPILING, AND LOGISTICS IT RESOURCES

Abstract

This dissertation examines research questions within two streams: (1) consumer behavior and retail operations and (2) Information Technology (IT) and operational performance. Specifically, the first two essays study the impacts of consumer stockpiling behavior on retail operations management using natural experiment methodology. The third essay explores the interaction of logistics IT resources, organizational factors, and operational performance. The first essay examines how environmental stress affects consumer stockpiling behavior using the 2008–2009 financial crisis as a natural experiment. Although overall consumption falls due to budgetary constraints, the essay shows that environmental stress increases consumers’ propensity to stockpile during promotional periods. As consumers exhibit a higher stockpiling propensity, retailers are subject to an increased demand variation between regular and promotional periods, exposing themselves to a higher stockout risk. Moreover, the increase in demand variation is compounded if retailers adopt a randomly-priced promotion strategy. Consequently, a high-low promotion strategy coupled with greater stockpiling propensity requires more safety stock inventory during times of environmental stress due to economic downturns. The second essay explores how retail operations performance varies in the face of consumer stockpiling behavior utilizing hurricanes as a natural experiment. The essay shows that supply-side characteristics (retail network and product variety), demand-side characteristics (hurricane experience and household income), and disaster-side characteristics (hazard proximity and hazard intensity) significantly affect consumer stockpiling propensity as the hurricane approaches. Further, increased consumer stockpiling propensity has an immediate and persistent impact on retail operations, such as higher product availability before hurricanes and lower product availability after hurricanes. Note that this impact depends on store formats. This study suggests retailers need to carefully monitor factors affecting consumer stockpiling behavior during natural disasters. This would allow retailers to better manage their inventories and increase their ability to fulfill consumer demand. The third essay studies the interaction of logistics IT resources, organizational factors, and operating performance. The previous typology of logistics IT resources is extended into four mid-level constructs: operations-focused IT, decision-focused IT, service-focused IT, and IT development capability. The results show that operations-focused IT, decision-focused IT, and IT development capability is more related to superior operating performance than service-focused IT. Moreover, it is shown that organizational factors, such as firm size, firm age, and firm ownership, may enhance or suppress the effects of logistics IT resources on operational performance. In general, logistics firms should carefully manage IT resources according to their particular organizational environment in order to achieve competitive advantage. The findings for the first two essays contribute to retail operations theory by proposing and testing novel questions about the impact of the presence of consumer stockpiling behavior on retail operations management using natural experiment methodology. The findings for the third essay contribute to business logistics theory by proposing a typology for logistics IT resources and testing hypotheses regarding the impact of logistics IT resources on logistics firms’ operational performance.