What we do (and don’t) know about online pricing: Evidence from e-commerce in the grocery sector

• Applicant: Dr. Svetlana Fedoseeva
• Subject Area: Agricultural Economics, Agricultural Policy, Agricultural Sociology
• Term: from 2018 to 2023
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 403102557

• Final Report Year: 2024

Final Report Abstract

Digitalization is an inevitable feature of a rapidly evolving globalized world. It has already brought about substantial changes in our daily lives, including the shopping experience and the traditional retail sector, with a significant share of all electronic, media, and leisure products being bought and sold online. This project aims to shed light on price formation and price development in online food markets, which have received little attention in the empirical literature due to their slower and later digitalization. While online retailers were still starting to enter the food retail market in 2018, by the end of 2023, large tech platforms dominated the online grocery markets on both sides of the Atlantic, competing with traditional food retailers for market share. Leveraging digital channels to reach and retain customers became a matter of competitiveness for conventional retailers, who increasingly embraced digitalization by becoming multichannel sellers. This competition, along with lower search costs for consumers and decreasing price-adjustment costs for online sellers, led to a transformation of traditional retailing and created a new dynamic relationship between online and offline retailers in the food and beverage market, which is the focus of my research. This project examines theoretical predictions regarding market digitalization and price levels and developments, analyzes existing evidence for predominantly non-food markets, and introduces a large-scale price data collection effort for German online food sellers before empirically assessing price rigidity, cross- and within-channel price heterogeneity, and dispersion, as well as the effects of exogenous shocks and resulting policy responses to food retail prices.

Publications

• (Dynamic) willingness to pay and e-commerce: Insights from sparkling wine sector in Russia. Journal of Retailing and Consumer Services, 57, 102180.
  Fedoseeva, Svetlana
  
• Lebensmittel-Preissetzung im Online-Handel – Amazon Fresh vor und während der Corona-Pandemie. Agrarpolitik-Blog, 18.12.2020.
  Irek, J. & Fedoseeva, S.
  
• E-commerce and the end of price rigidity?. Journal of Business Research, 125, 63-73.
  Hillen, Judith & Fedoseeva, Svetlana
  
• Implicit prices of attributes of fine German Riesling: magnitude and heterogeneity. British Food Journal 125 (4), 1245-1262. https://doi.org/10.1108/BFJ-02-2022-0108 (preprint in Open Access)
  Fedoseev, V., Fedoseeva, S. & Herrmann, R.
  
• Regionale Preisunterschiede im Online-Lebensmittel-Handel: Erkenntnisse von Amazon Fresh. Agrarpolitik-blog, 10.05.2022.
  Irek, J. & Fedoseeva, S.
  
• Same DNA, same location, same price? Price differences across distribution e‐channels of a single online retailer. Agribusiness, 38(4), 874-884.
  Fedoseev, Vladimir & Fedoseeva, Svetlana
  
• Within-retailer price dispersion in e-commerce: Prevalence, magnitude, and determinants. Q Open, 3(3).
  Fedoseeva, Svetlana & Irek, Judith
  
• Assortments and prices in online grocery retailing. Digital Business, 3(1), 100054.
  Fedoseeva, Svetlana & Herrmann, Roland
  
• Grocery prices in German e-commerce [Data set]. Zenodo.
  Fedoseeva, S.
  
• Pandemic pricing: Evidence from German grocery e‐commerce. Agribusiness, 39(4), 1139-1156.
  Fedoseeva, Svetlana & Van, Droogenbroeck Ellen
  
• Temporary VAT rate cuts and food prices in e-commerce. Journal of Retailing and Consumer Services, 77, 103693.
  Fedoseeva, Svetlana & Van, Droogenbroeck Ellen