5 Market Entry

(Maesen and Lamey 2022) Organic Specialist Store Entry effect on Incumbent stores

  • Negative Impact of organic specialist store entry on category performance at incumbent generalist stores (in term of sales)

  • It also exaggerates the impact of price on sales

  • To mitigate this negative effect, the generalist stores can reduce the relative distinctiveness of the entrant along:

    • variety: increase variety in organic product and organic feature

    • price-quality

    • authenticity

  • Premium organic products are harmed less than frequently promoted organic products

  • Offering an organic specialist brand can mitigate this effect as well

(Bei and Gielens 2022) first vs. third party operations

  • First party operation (wholesale to platform) decreases share, while third-party (selling on platform) operation increases shares.

  • For 1P operations, share drops are bigger for brands that can’t build trust with customers, especially when there are a lot of other brands and a lot of rogue sellers in the product category.

  • the 3P share gains are bigger for non-leading brands with premium priced that have had D2C experience before.