The Impact of Co-Location of Departments on Joint Sales in Retail Stores

May 03, 2024 | 11:30 AM

MDI Gurgaon is proud to invite the eminent speaker Dr. Laxminarayana Yashaswy (Yash) Akella, Postdoctoral Research Fellow at the Tuck School of Business at Dartmouth, PhD (IIMA), who will share his thoughts on the topic: The Impact of Co-Location of Departments on Joint Sales in Retail Stores.

Date:  3rd May 2024   (Friday)
Time:  11.30 AM   IST
Mode: Hybrid

Session's abstract: The co-location of departments can help retailers increase joint sales.  Although prior research has examined co-location of products at the shelf and aisle level, they overlook space elements at the store level. Department co-location can affect joint sales differently depending on whether inter-departmental proximity is near or far.  Guided by a goal-completion framework and using novel data from blueprints and sales across 64 stores for 52 weeks, we find a curvilinear relationship between inter-departmental proximity and joint sales, such that when departments are in close proximity goal-completion is more likely to be fulfilled through consumers making substitute purchases; as departments are farther away goal-completion can be fulfilled through complementary product purchases, until at some point goal-completion becomes challenging because the distance between departments is too great. We also show these relationships are enhanced when departments have non-identical layouts, when consumers perceive departments as complementary, and when there are larger variety differentials across departments. These boundary conditions provide a deeper understanding of how salience of products used for goal-completion influences the complex relationship between department co-location and joint sales.  

The session will be astutely moderated by Prof. Kirti Sharma (Associate Professor, Marketing, MDI Gurgaon).