Market definition when customers multi-source: What can we learn from wholesaling markets?

Retail markets are changing in the EU. The rapid growth of e-commerce is disrupting traditional shopping missions. Two features of this changing customer behaviour are particularly important. First, customers are increasingly breaking up their shopping baskets and multi-sourcing; second, they are sourcing from different channels - mixing online delivered and bricks and mortar collect sales. In this article we explore the implications of this kind of multi-sourcing behaviour for market definition. We use the case study of grocery wholesale - a market where this type of customer behaviour is well established. We highlight the risk of defining markets according to a particular business model or sales channel in a world where shopping behaviour is increasingly diverse.

I. Introduction 1. The changing face of retail shopping behaviour in the EU 1. Market definition used to be a simple task, at least in many retail markets. Customers want a particular product, and it is pretty obvious what their options are. Firms in the market, aligning themselves to what customers want, had a broadly similar way of delivering it. 2. So it used to be. Traditional retail behaviour is increasingly dissolving as the 21st century marches on. This is laid bare in the preliminary results of the European Commission’s e-commerce sector inquiry. It shows that over the past ten years, the proportion of retail sales going via exclusively bricks-and-mortar distribution channels has fallen from 70% to around only 40%. [1]Today, around a third of retailers list their products on

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  • Frontier Economics (London)


David Foster, Market definition when customers multi-source: What can we learn from wholesaling markets?, November 2017, Concurrences Review N° 4-2017, Art. N° 84943,

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