E-Commerce vs. retail commerce : an empirical analysis of price comparaison on a homogeneous product : books in the Portuguese retail market and on-line markets

Abstract

The objective of this dissertation is the study of book’s price level differences and dispersion among conventional and on-line retailers. It is, thus, an empirical study within the Portuguese environment in order to understand which is, in the end, the retailer type that provides higher welfare to consumers. The study consists of three main parts: a Literature review of existing research on the subject; the Empirical Study and a discussion of the project key findings. In the first part, findings of key studies on the subject are reviewed, namely on commerce,e-commerce and factors influencing price and product positioning in conventional and online retailers. The studies reviewed argue that on-line retail price for books can be expected to be different from conventional retailers; it was used a similar methodology to understand whether, for the Portuguese case, price levels and dispersion was higher or lower on-line. In the second part the empirical study compares both retail and on-line channels. The model applied regards the analysis of price level, price dispersion and price range for each item. The quantitative results of the data gathered serve as basis of analysis to discuss in the context of the knowledge reviewed in the first part. In the third part, the key results of the study are described and its contribution to the final outcome of the project is discussed, as well as its concrete the managerial implications. As a summarized outcome of the project, it is concluded that on-line prices in the Portuguese market for books are in November 2009 is, on average 13,9% lower than in conventional retailers and that price dispersion is 421,2% higher on-line.