Author: Chuck Finder

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About Chuck Finder

This long-ago graduate of the University of Missouri-Columbia returns to the state to lead a talented team of professionals in promoting the university’s efforts via media relations. I arrived here after helping to share news and information about the University of Pittsburgh Medical Center (UPMC) and Carnegie Mellon University. Before that, I spent three decades with the Atlanta Journal-Constitution, Birmingham News and Pittsburgh Post-Gazette, though also dabbled as a contributor to numerous outlets — ranging from the former St. Louis-based institution The Sporting News to The New York Times.


To lure customers, online retailer Alibaba often targeted existing customers when marketing resources were limited. Then along came a research project with a novel question: What if you pursued prospective customers, and then tracked their offline and online spending habits compared to frequent customers?

That’s how two Olin Business School researchers, along with a former fellow Olin faculty member and Alibaba officials, flipped the pop-up business model, and possibly more. The co-authors found that inviting potential customers via text message could increase buying with both a pop-up shop retailer and similar product vendors online.

In fact, that online shopping hangover — which they labeled a “spillover effect” — spread over far more retailers than the original participants and lasted as long as six weeks to three months after the initial text/pop-up lure.

Their paper, “The Value of Pop-Up Stores on Retailing Platforms: Evidence from a Field Experiment with Alibaba,” was published online Sept. 5 and is forthcoming in the journal Management Science.

Zhang

“Pop-up stores have become an increasingly popular channel for online retailers to reach offline customers,” said co-author Dennis Zhang, assistant professor of operations and manufacturing management at Olin. “Pop-up stores are cheap and fast to build, which means that those internet-based retailers can test building them in many different locations and find the best strategies.”

All this increased spending starts with a pop-up shop and a cellphone invite.

Pop-up week of jeans sales

Co-authors Zhang and Lingxiu Dong, professor of operations and manufacturing management, worked on the huge project wiith former Olin colleague Hengchen Dai of UCLA and Alibaba’s Qian Wu, Lifan Guo and Xiaofei Liu. The group conducted the experiment tracking some 799,904 Alibaba-app customers during a pop-up week of jeans sales in October 2017 in Hangzhou, China, southwest of Shanghai. Next, they followed those customers’ habits online for six- and 12-week periods to follow.

Dong

They randomly split the customers into two sets living within 6.2 miles of the pop-up: those who received a text-message invite — making no mention of brands, coupons or participant retailers — and control-group members who didn’t get an invite.

Using a type of “Internet of Things” (IoT) technology and the customers’ Alibaba apps, they were able to track customers even when the customers bought nothing in the pop-up, which mostly was an online portal that allowed them to use a virtual fitting-room function to “try on” jeans on a screen. (Customers also found coupons once they arrived at the physical store.)

Building trust with platform itself

Some of the findings:

  • Foot traffic increased by 76.19% because of the text invites; using the tracking information to determine frequent/existing from infrequent/prospective customers, the researchers found that the text invites increased foot traffic among the former by 200% and the sought-after second group by 69%.
  • Invitees spent 39.51% more money on participating retailers online long after the original pop-up visit. They also spent 17.17% more on non-participating retailers, defined as those beyond the pop-up vendors and carrying at least 10 jeans products on their online stores.
  • The buzz continued for those non-participating retailers deep into the New Year, some 12 weeks after the October pop-up week. Their sales saw a 14.89% increase while participating retailers experienced no lingering effect, at least not one that was statistically significant either way.

“This suggests that customers are not only building trust with specific retailers on the platform but also with the platform itself.” Zhang said.

The researchers found that the text invites increased foot traffic among existing customers by 200% and the sought-after prospective customers group by 69%.

“The experiment offers insights into the relationship and dynamics of online and offline shopping behaviors, which can be very helpful for retailers to devise omni-channel strategies,” Dong said.

The co-authors surmised that the pop-up visits served as a “transient billboard”: The shop advertised the presence, and thereby increased awareness, of these retailers — existing, frequent customers were already under the tent, but the prospective customers could be won over a fiscal quarter at a time. The visits also provided “experiential learning” so customers could assess these retailers’ products.

They also realize this experiment centered on jeans, a product requiring a good fit, feel. Commodity products — entertainment devices, food, etc. — could be evaluated more easily “without touching or trying on.”

Then again, it revolved around the online retailer Alibaba rather than a line of physical stores/chains. The study suggests positives for both types via pop-ups and invites, though the next step in research is to study pop-up store effects for traditional, omni-channel retailers. Using data correctly, the co-authors said, many retailers could be able to create personalized shopping experiences for both offline and online sales.

“As we have shown, pop-up stores are very efficient in reaching offline customers and attracting them online. This will be a good strategy for retailers who face online growth pressure in certain areas.” Zhang said.




Consider the parent playing the role of air traffic controller with his or her child’s busy schedule. First, there is homework for the kid to finish in the next hour. Then comes soccer practice followed by a piano lesson for the ensuing two hours.

“If the parent knows the deadlines and the kid just does their work, it’s the best of both worlds,” said co-author Stephen Nowlis, the August A. Busch Jr. Distinguished Professor of Marketing at Olin Business School at Washington University in St. Louis. “But if the parent is trying to get work done on their time …

“The big picture is, setting all these deadlines seems like a good idea. But too many deadlines makes you use your time less efficiently.”

Nowlis

That was the central finding of an eight-test study published May 15 in the Journal of Consumer Research titled, “When an Hour Feels Shorter: Future Boundary Tasks Alter Consumption by Contracting Time.” The boundaries in question are upcoming appointments, meetings, tasks, etc. And the researchers found that people facing them: (a) perceive they have less time than in reality; (b) perform fewer tasks as a result; and (c) are less likely to attempt extended-time tasks that can be feasibly accomplished or more lucrative.

When up against such an upcoming appointment, people tended to procrastinate on the long-time chore such as writing that report and reverted to working on shorter-time tasks, as in making a work call or typing up a quick synopsis. Or they’d skip both entirely to focus on the simplest of work forms, like answering emails …  or scheduling more boundaries.

“It’s something we can all relate to,” said Nowlis, who started this project when co-author Gabriela N. Tonietto of Rutgers was a PhD candidate at Olin and co-author Selin A. Malkoc of Ohio State was an Olin colleague. “It could be anything. You have a deadline, and what do you do with your time? We don’t think about it as much from the perspective of consuming it, but, realistically, time is something we probably consume as much if not more than any other resource. So how are we consuming our time?”

The researchers conducted more than eight tests over a two-year period beginning in 2015 involving 2,300-plus participants to see how people in various situations arrived at budgeting scheduled and unscheduled windows of time. Among the tests included in the Journal of Consumer Research study were:

  • Using the Amazon Mechanical Turk (MTurk) survey platform, 200 participants — split evenly between those with an upcoming appointment and those with a free schedule — were asked to pick between a 30-minute chore paying $2.50 and a 45-minute chore paying $5. They had an hour’s time. But the participants with an upcoming appointment felt they had 7.82 fewer minutes in their hour to commit to their chore than the people with an open schedule.
  • At Chicago’s O’Hare International Airport, 134 passengers were asked to take a 15-minute survey — about half of the passengers had 30 minutes before boarding, the rest had one hour. Some 26 percent of the people facing a shorter window agreed to participate, compared to 46 percent of the passengers with four times the allotted survey window.
  • At Washington University, 158 undergraduates were told they had either a strict, five-minute window until their appointment or an implied boundary with “about five minutes to do whatever you want.” In the same five-minute period, the latter group accomplished 2.38 tasks compared to 1.86 tasks by the hard-timeline group.

“How do you best manage your time? How much scheduling do you need?” Nowlis said. “These are interesting questions.”

Their study provided some answers for trying to prevent issues. Basically, it counsels people to schedule wisely: Maybe leave a chunk of the work day open to accomplish extended-time tasks.

“If you have some big tasks, too many scheduled things will affect your productivity,” Nowlis said. “A lot of scheduling is fine for shorter tasks.

“So find the environment that works for you.”

This piece ran originally in The Source from WashU public affairs.




For the third time in four years, a Washington University in St. Louis faculty member has received the highest award that the People’s Republic of China bestows on an individual in higher education.

Fuqiang Zhang, professor of operations and manufacturing management at Olin Business School, has been selected to receive the Yangtze River Scholar Award by the Chinese Ministry of Education.

As an international recipient of the award, Zhang will receive the title of Yangtze River Chaired Professor at the School of Management, University of Science and Technology of China (USTC) and a significant research grant.

This marks the fourth person affiliated with Washington University since 2015 to earn a Yangtze River Scholar honor — also known as the Changjiang Scholar:

  • Shenyang Guo, Frank J. Bruno Distinguished Professor of Social Work Research at the Brown School and assistant vice chancellor for international affairs — Greater China, was named in spring 2017;
  • Guy Genin, professor of mechanical engineering and materials science at the School of Engineering & Applied Science, was named in mid-2015; and
  • Pang Xun, who earned a doctorate in political science from the university in 2010, is an associate professor of international relations at Tsinghua University and won the Young Scholar category earlier in 2017.

Zhang joins a previous Olin awardee: Phil Dybvig, Boatmen’s Bancshares Professor of Banking and Finance, was named a Yangtze River Scholar in 2011 via Southwestern University of Finance and Economics in Chengdu, Sichuan, China.

Few U.S. universities have as many as two current Yangtze River Scholars. Zhang received his award from the Ministry of Education in May.

“I am very proud to have outstanding faculty like Professor Zhang on our faculty. With his appointment to be a Yangtze River Scholar, he will have the opportunity to develop collaborations in an important area of research with researchers at a premier university in China,” Chancellor Mark S. Wrighton said.

“I am deeply honored to receive this award,” Zhang said. “The School of Management at USTC is a strategic partner of the Olin Business School. The award will provide a great platform to promote research collaboration between the two schools. The internet economy has been growing at an amazing speed in China. I plan to work on data-driven supply chain research with applications to the global e-commerce industry. I also hope the platform will help our school to develop further relations with the educational and industry sectors in China.”

Since his arrival at Olin in July 2007, Zhang has worked on dozens of research papers and won numerous honors, among them the Wickham Skinner Early-Career Research Accomplishments Award from the Production and Operations Management Society in 2009, the Distinguished Service Award from the Management Science journal in 2009 and 2010, and “best paper” awards at the Chinese Scholars Association in Management Science and Engineering conferences in 2011, 2014 and 2016. He also has won research grants from the National Natural Science Foundation of China in 2012, 2015 and 2016.

He serves as a department editor for the Journal of Management Science and Engineering and an associate editor for such journals as Management Science, Manufacturing & Service Operations Management, and Omega-The International Journal of Management Science.




If Americans fulfilled their java urges the same way they carefully shopped for groceries, they would visit five to seven various chain coffee shops regularly—for a blend of different categories.

In fact, it turns out that grocery categories such as dessert toppings, motor oil, candles and refrigerated ethnic foods were some of the leading products that lure customers to separate stores.

In the first test of detailed consumer-buying habits by categories at more than one chain store selling groceries, a team of business school researchers led by Washington University in St. Louis found that shoppers weren’t monogamist or bigamist but rather polygamist in their choice of outlets.

The vast majority—a whopping 83 percent—regularly visited between four and nine chain stores within a year’s time to purchase groceries. Of 1,321 households studied among this rich dataset, only 12 stayed loyal to just one store. More than half, at 51.1 percent, went to the average of five to seven different stores. Eighty-eight households, or six of every 100, went to 10 or more.

So much for store loyalty.

Shattering conventional wisdom on grocery loyalty

Using tracked data from a vendor utilizing a swipe card akin to a loyalty card, the researchers parsed more than $1 million worth of shopping transactions over 53 weeks involving 248 types of products sold at 14 retail chain stores in a large metropolitan market. The study, “Polygamous Store Loyalties: An Empirical Investigation,” was published last month in the Journal of Retailing.

“Store loyalty was pretty much a given in grocery retail,” said senior author Seethu Seetharaman, director of the Center of Customer Analytics and Big Data and the W. Patrick McGinnis Professor of Marketing at Olin Business School. “When people do their shopping, it’s the store close to where they live—location, location, location, like the real-estate mantra.

“Then there is a group of choosy consumers who stop at many stores, shopping for bargains or certain brands or products,” he said. “They’ve been called ‘cherry pickers.’” Often, those folks were associated with coupon shoppers.

“That made us do a deeper dive, and we found that people aren’t as store loyal as we thought,” Seetharaman said. “Clearly, people are polygamous. The majority of people are shopping at six grocery stores.”

Consumers tend to shop multiple stores for multiple reasons. In fact, the data showed little loyalty to a single store or handful of stores, but more so to types of products found in a store. Consumers shopped various stories for specific product categories: frozen treats at one grocer, meat and poultry at another, and so on. The researchers called this “intrinsic store-category attractiveness.”

Seetharaman was joined in this study by one of his former graduate students, Qin Zhang, assistant professor of business at Pacific Lutheran University, and one of Zhang’s former graduate students, Manish Gangwar, assistant professor of marketing at the Indian School of Business. They specified and estimated a statistical model of how consumers fractured their shopping basket and shared their wallet across stores.

Shoppers aren't as loyal to their grocery stores as conventional wisdom would have you believe, according to new research by Olin's Seethu Seetharaman.

Shoppers aren’t as loyal to their grocery stores as conventional wisdom would have you believe, according to new research by Olin’s Seethu Seetharaman.

‘Favorite’ stores account for 40 percent of the basket

The dataset comprised chains that were either traditional supermarkets (Albertsons, Bashas’, Food 4 Less, Food City, Fry’s Food Store, IGA, Safeway, Trader Joe’s and Wild Oats Market), supercenters (Kmart and Walmart) and warehouse clubs (Costco, Sam’s Club and Smart & Final). Further evidence of an ever-changing economy in which to purchase grocery, household and health and beauty products: Some of the studied chains have dwindled since the study and no longer service several of their previous states.

“It’s very diffuse,” Seetharaman said of consumers’ purchases from a larger-than-expected list of stores. “Only 40 percent of their basket is coming from their ‘favorite’ store.”

Some other findings from the research:

  • In the market surveyed in particular, Fry’s Food Stores emerged as the market favorite by a sizable margin, with Albertson’s, Safeway and Walmart next behind it.
  • In a large set of categories, a handful of stores competed intensely: Albertson’s, Bashas’, Safeway and Fry’s.
  • Warehouse clubs attract loyalty in categories different from the traditional supermarkets and supercenters.
  • Family size predicted store loyalty—the larger families tended toward Fry’s or a Walmart Supercenter.
  • Income was a somewhat surprising predictor, in that households with higher incomes were more likely to “budget shop” at a Costco, which could be explained by the fact that large houses with large basements are usually needed to store products bought in bulk.

Companies in the grocery, household item and healthy/beauty realm could learn from such a category-intensive study, Seetharaman said. “This gives you a good sense of what you are winning, and how you are winning. But there’s no silver bullet.”

“Will it be a surprise?” Seetharaman asked. “Yes, it will be a surprise,” he said. “The traditional wisdom is: Walmart is an aggressive, everyday-low-price price retailer and Target is the assortment retailer. So let’s say both mass merchandisers … each of them has a certain strategic positioning and therefore thought they attract a certain type of consumer.

“We are upending that wisdom a little bit here: No matter what kind of strategic positioning you have carved out, consumers have a mind of their own. They are choosing to do different things in different categories. And businesses should wise up to this. Even your core customer is buying categories at other shops.”