In this paper, we investigate optimal pricing strategies for an online grocery retailer that derives its profits from delivery fees and grocery sales. We base our theoretical framework on the well-established work of Schmalensee (1981) in two-part pricing, while allowing for repeat purchase...

For a traditional retailer, the size of the customer pool can evolve over time but is largely bounded in space. In contrast, an Internet retailer with the appropriate shipping infrastructure can draw customers from a wide-ranging geographical area (e.g., the entire United States). We examine the...

Firms often need to promise a certain level of service quality to attract customers, and a central question is how to design promises to balance the trade-off between customer acquisition and customer retention. For example, most E-commerce platforms need to promise a certain delivery time....