While e-commerce is driving retailers to change prices more frequently, it is also leading to more uniform pricing across online and offline retailers.
A paper by Alberto Cavallo of Harvard University found evidence that the algorithms used by internet-based retail giants like Amazon to constantly change and adjust prices have led to greater price fluctuations in response to various macroeconomic shocks. This so-called ‘Amazon Effect’ not only forces brick-and-mortar outlets to respond in a similar manner but also
-> Continue reading DNA India – “The Amazon effects and monopsony”
The influence of a growing online retail industry increases consumers’ exposure to the fluctuations of energy prices and exchange rates.
According to Harvard Business School professor Alberto Cavallo, e-commerce is flatlining competition.
Prices for groceries sold by Walmart vary less from one store to another when Amazon markets the same references.
Amazon Effect: researcher claims web giant’s low prices keep inflation in check
Retailers adjusting prices more frequently and uniformly across locations should react faster to economic shocks, shows a recent study
Competition between Amazon and traditional retailers is causing prices to become more uniform