Advance selling of new products to strategic consumers on flash sale platforms*

Mingyang Zhang, T. C.E. Cheng, Jie Du

Research output: Journal article publicationJournal articleAcademic researchpeer-review

3 Citations (Scopus)

Abstract

Flash sale (FS) is a new business model that offers discounted products in limited numbers over a short period. In this paper we discuss the impact of strategic consumers on advance selling (AS) of new products on FS platforms. We first study the impact of strategic consumers on competing retailers adopting AS to sell a homogeneous new product. And find that the retailers’ AS profits and inventory quantities decrease with the strategic customers’ valuation and valuation decreasing rate. Then we analyse whether FS can mitigate the impact of strategic customers on retailers adopting AS for new products. We consider a newsvendor model involving only one retailer adopting AS to sell a new product. We derive the results by comparing this model with two counterpart models, namely the classical newsvendor model with no strategic customers and a newsvendor model with strategic customers where the retailer does not use FS under AS.

Original languageEnglish
Pages (from-to)318-331
Number of pages14
JournalInternational Journal of Logistics Research and Applications
Volume21
Issue number3
DOIs
Publication statusPublished - 4 May 2018

Keywords

  • advance selling
  • Flash sale
  • new products
  • strategic customers

ASJC Scopus subject areas

  • Management Information Systems
  • Control and Systems Engineering
  • Information Systems
  • Computer Science Applications
  • Management Science and Operations Research

Cite this