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.