arXiv:2402.06158v2 Announce Type: replace-cross Abstract: In the rapidly evolving landscape of retail, assortment planning plays a crucial role in determining the success of a business. With the rise of sponsored products and their increasing prominence in online marketplaces, retailers face new challenges in effectively managing their product assortment in the presence of sponsored products. Remarkably, previous research in assortment planning largely overlooks the existence of sponsored products and their potential impact on overall recommendation effectiveness. Instead, they commonly make t
The proliferation of sponsored products in online retail environments necessitates new algorithmic approaches to assortment planning that account for their impact.
This research highlights a gap in current retail optimization strategies and provides a foundation for more effective management of product assortments, directly impacting e-commerce profitability and user experience.
Retailers and online marketplaces will need to integrate sponsored product mechanics into their core assortment planning, moving beyond traditional models that ignore this crucial factor.
- · E-commerce platforms
- · Retailers adopting advanced assortment algorithms
- · AI/ML providers for retail optimization
- · Retailers using outdated assortment planning models
Improved revenue and customer satisfaction for retailers who effectively integrate sponsored products into their assortment strategies.
Increased competition among e-commerce platforms to offer the most sophisticated and profitable sponsored product models.
Potential for new regulations or transparency requirements around sponsored product placement if not managed ethically or effectively.
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