News
UTEcon has released a report titled “The Role of Data in the Retail Industry: An Economic Assessment”
UTokyo Economic Consulting Inc. has released a report titled “The Role of Data in the Retail Industry: An Economic Assessment” on December 8, 2021. The report was commissioned by Amazon Japan G.K.
Title:
“The Role of Data in the Retail Industry: An Economic Assessment”
Summary:
Data collection and usage enable businesses to make better decisions. Data usage by firms has the potential to promote competition by reducing the search costs faced by consumers, which in turn leads to lower prices and greater consumer welfare. In this report, we examine how these benefits are realized in the retail industry, while addressing concerns that data accumulation by firms could create entry barriers or increase users’ switching costs. Our findings suggest that, due to the availability of data from third-party vendors, service differentiation between retailers, and the prevalence of multi-homing by consumers and business users, data accumulation by firms is unlikely to give rise to entry barriers or substantially increase switching costs. We also discuss the implications of our findings for recent policy initiatives that aim to promote competition by mandating data access or enhancing data portability.