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When to launch a sales promotion for online fashion products? An empirical study

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Abstract

Sales promotion will increase sales of online fashion products, but very little research has been performed to address when to launch a promotion after a new product is released. We address this question by considering collective selection from the perspective of fashion theory and by integrating signals of trust that are of common concern of consumers in the e-commerce setting. We develop semiparametric regression models to estimate the sales promotion effect to decide when a promotion should be launched. These models are also used to analyze the sales promotion effect of complementary matching, the previous sales promotion and the characteristics of the sales promotion event. The results show evidence regarding (1) the best time to launch a promotion after a product is released online; (2) the existence of a saturation effect of cumulative sales, which represents credible information of trust; and (3) the promotion effect of the complementary matching, the previous promotion and the characteristics of the promotion event.

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Notes

  1. The sales rank referenced is the Amazon Best Sellers Rank, which is calculated based on Amazon.com sales and is updated hourly to reflect recent and historical sales of every item sold on Amazon.com. In order to keep these lists fresh, useful, and up-to-date, recent sales are weighted more heavily than sales that occurred in the distant past. Amazon does not publish the actual quantity of items that have sold. The best sellers rank is a relative measure to illustrate the sales of each item in comparison to the others. https://www.amazon.com/gp/help/customer/display.html/ref=help_search_1-1?ie=UTF8&nodeId=201929910&qid=1513001235&sr=1-1

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Acknowledgements

The first author was partially supported by the Shandong Key Research and Development Plan under Grant No. 2016GGX106005 and Shandong Social Science Planning Fund Project under Grant No. 18CGLJ06.

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Authors and Affiliations

  1. Business School, Shandong Yingcai University, Jinan, 250104, Shandong Province, People’s Republic of China

    Haiqing Hu

  2. Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA, 15260, USA

    Pandu R. Tadikamalla

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  1. Haiqing Hu
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  2. Pandu R. Tadikamalla
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Correspondence to Pandu R. Tadikamalla.

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Hu, H., Tadikamalla, P.R. When to launch a sales promotion for online fashion products? An empirical study. Electron Commer Res 20, 737–756 (2020). https://doi.org/10.1007/s10660-019-09330-1

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