Abstract

http://ssrn.com/abstract=1851643
 
 

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Measuring the Effect of Queues on Customer Purchases


Yina Lu


Columbia University - Columbia Business School

Andres Musalem


Duke University - Fuqua School of Business

Marcelo Olivares


Columbia University - Columbia Business School - Decision Risk and Operations; University of Chile - Departamento de Ingenieria Industrial

Ariel Schilkrut


SCOPIX

November 6, 2012

Columbia Business School Research Paper No. 12/23

Abstract:     
We conduct an empirical study to analyze how waiting in queue in the context of a retail store affects customers’ purchasing behavior. Our methodology combines a novel dataset with periodic information about the queuing system (collected via video recognition technology) with point-of-sales data. We find that waiting in queue has a non-linear impact on purchase incidence and that customers appear to focus mostly on the length of the queue, without adjusting enough for the speed at which the line moves. An implication of this finding is that pooling multiple queues into a single queue may increase the length of the queue observed by customers and thereby lead to lower revenues. We also find that customers' sensitivity to waiting is heterogeneous and negatively correlated with price sensitivity, which has important implications for pricing in a multi-product category subject to congestion effects.

Number of Pages in PDF File: 41

Keywords: queuing, service operations, retail, choice modeling, empirical research, operations/marketing interface

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Date posted: May 26, 2011 ; Last revised: December 15, 2012

Suggested Citation

Lu, Yina and Musalem, Andres and Olivares, Marcelo and Schilkrut, Ariel, Measuring the Effect of Queues on Customer Purchases (November 6, 2012). Columbia Business School Research Paper No. 12/23. Available at SSRN: http://ssrn.com/abstract=1851643 or http://dx.doi.org/10.2139/ssrn.1851643

Contact Information

Yina Lu
Columbia University - Columbia Business School ( email )
3022 Broadway
New York, NY 10027
United States
Andres Musalem
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
Marcelo Olivares (Contact Author)
Columbia University - Columbia Business School - Decision Risk and Operations ( email )
3022 Broadway
Uris Hall, #417
New York, NY 10027
United States
HOME PAGE: http://www.columbia.edu/~mo2338/index.htm

University of Chile - Departamento de Ingenieria Industrial ( email )
Republica 701 Santiago
Chile
Ariel Schilkrut
SCOPIX ( email )
1350 Bayshore Hwy
Ste 665
Burlingame, CA 94010
United States
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