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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Aug 17, 2020

Managing the Impact of Fitting-Room Traffic on Retail Sales: Using Labor to Reduce Phantom Stockouts


Problem definition: Brick-and-mortar (B&M) retailers must enhance the customer in-store experience to better compete with online retailers. Fitting rooms in B&M stores play a critical role in the customer experience as a venue to experience products and examine alternatives. High traffic in fitting rooms, however, obstructs the customer’s ability to choose a product. In this paper, we (1) examine the impact of fitting room traffic on store performance using archival data, (2) identify phantom stockouts as a plausible mechanism for this impact, and (3) provide a potential solution and quantify the magnitude of its impact using two field experiments.

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