Retail network performance evaluation: a DEA approach considering retailers' geomarketing

Abstract

Stores develop customized assortments based on localization characteristics. In terms of performance analysis, these changes make it more difficult to analyse store performance. This adjustment procedure entails an internal benchmarking which needs small samples to control regional and assortment effects. This paper explores the influence of competitive environment and store neighbourhood characteristics on store efficiency by using three data envelopment analysis (DEA) models. This research is illustrated by using real data from a French supermarket retail chain at the product category level. It is shown that the two-steps DEA model is a relevant analysis tool to take into account location aspects. It presents a discriminant power strong enough to derive managerial implications with small samples.

Technical efficiency and human capital in the retail sector

“…As for the determinants of technical efficiency, limited attention has been given by researchers to the impact of environmental variables on technical efficiency (Donthu & Yoo, 1998;Vyt, 2008). There are though a few remarkable exceptions.…”

“…Traditionally, input -output ratios were used to measure the performance of stores (Vyt, 2008), but a cursory look at the recent literature in this area shows that they have been supplanted by frontier techniques. In this approach, technical efficiency is computed as the distance from an estimated optimal benchmark, the 'production frontier', that defines the optimal amount of output that can be produced in a sector given the available technology.…”

Spillover effects of investment in big data analytics in B2B relationships: What is the role of human capital?

“…Measuring technical efficiency of the retail sector along with its determinants has become an important research area amid growing concerns about the sector's slowgrowing productivity (Barros & Alves, 2004;Lusch, Serpkenci, & Orvis, 1995;Kamakura Lenartowicz, & Ratchford, 1996). Traditionally input-output ratios were used to measure the performance of stores (Vyt, 2008) -although the main limitation of the technique is that the presence of economies of scale cannot be tested. A cursory look at the recent literature in the area shows that frontier techniques have become a very common tool to measure technical efficiency in the sector.…”

Efficiency and projection of categorical DMUs: a frontier analysis approach

“…With the tremendous increase in competition and different market conditions, one of the major areas where retailers are focusing is managing the stores at different locations (Vyt, 2008). Location is also important because it involves huge investment, which adds to cost of an organization.…”