The problem of shelf-warmers in electronic commerce: a proposed solution

Abstract

This paper presents the significant problem of so called shelf-warmers in the environment of electronic commerce. In the first part of the paper, the factors that have led to an increasing stock of shelf-warmers in online stores are discussed. These factors are divided into two groups: those that occur mainly in an online store environment and those not specifically associated with an online environment. One group of factors are related to the large number of items offered in an online store enabled by various models of inventory management (e.g. drop-shipping, 3PL, 4PL), the lack of a need to maintain costly space for the exposition of goods, the heterogeneity of online shoppers and the large number of returns from customers. The other group of factors concern incorrect forecasts of demand, inappropriate inventory control, choice of product assortment, pricing policies and the end of a product's life cycle. The problem of appropriately identifying shelf-warmers is then discussed and an index measuring the tendency of a good to be a shelf-warmer is proposed. Based on this, different methods for dealing with shelf-warmers are outlined in the form of the use of recommendation systems, search engine optimization and social media. The paper then presents an experiment conducted in a real business environment to assess the effectiveness of some of the aforementioned methods. This experiment resulted in the sale of approximately 33% of 160 selected shelf-warmers and over 50% from one group (number 8) where all the suggestions were implemented, within a period of 10 months. The results obtained show that the methods and recommendations proposed may help online stores to deal with the problem of shelf-warmers.