Although U.S. e-commerce sales now exceed one trillion dollars annually, cross-category empirical evidence on how different pricing strategies perform under inflationary pressure remains limited. This study examines 36 months of panel data from 89 U.S. online retailers across four product categories (electronics, fashion, grocery, and home goods) using fixed-effects regression and difference-in-differences estimation. The aggregate price elasticity of demand is estimated at -1.34, with pronounced cross-category heterogeneity ranging from -1.72 in electronics to -0.89 in fashion. Dynamic pricing raises revenue by an average of 12.3% but simultaneously increases cart abandonment by 8.7%, revealing an inverted-U relationship between pricing intensity and net gains. Promotional frequency exhibits diminishing returns beyond three events per quarter, while charm pricing improves conversion rates by 3.2% relative to round-number prices. During high-inflation quarters, consumers shift markedly toward value-segment retailers. Taken together, the results indicate that retailers should calibrate pricing tactics by category rather than adopt one-size-fits-all strategies.
Kwon et al. (Wed,) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: