Some good data and analysis here. How much is the effect and in what business contexts? Striking how much private label development is going on now in traditional Grocery, price competition there too.
The 'Amazon Effect' Is Changing Online Price Competition—and the Fed Needs to Pay Attention
by Roberta Holland in HBSWK
Amazon's power in the retail sector puts price pressure on what competitors charge, with implications for how federal regulators govern inflation, says Alberto F. Cavallo.
It’s no secret that fierce competition from Amazon puts downward pressure on prices charged by Walmart and other big multichannel retailers for the same items. However, the bigger “Amazon effect” relates not to the prices themselves but to the pricing behaviors of these more traditional retailers, according to Alberto Cavallo, the Edgerley Family Associate Professor at Harvard Business School.
Cavallo, who bases his findings on a decade’s worth of pricing data, sees two notable changes with large multichannel retailers: faster price increases and more uniform pricing between disparate locations.
“It’s not about just the markup, which, to some extent, is just a temporary effect,” Cavallo says. “If competition with Amazon changes the way firms such as Walmart or Best Buy make pricing decisions, it can have much longer-lasting effects on inflation dynamics and other macroeconomic phenomena.” .... "
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment