An empirical analysis of the financial impact of quick response

Abstract

Purpose

This research aims to measure the financial and operating impact for US retailers that adopted quick response (QR). It specifically looks at the impact of QR on profitability, cost efficiency, and inventory management.

Design/methodology/approach

The research analyzed data from the CRSP/Compustat data base of US publicly held corporations to compare adopters of QR with non‐adopters before and after adoption.

Findings

The results indicated that adopters of QR did not benefit as expected. Adopters, on average, did not improve their performance to a statistically significant degree with respect to profitability, cost efficiency, or inventory levels.

Research limitations/implications

The main limitations of the research include the fairly small number of firms studied (11 adopters and 16 non‐adopters) and the lack of evidence identifying the reasons for the adopters poor performance. Another limitation is the fact that only the manufacturers perceptions have been considered. It would be beneficial in future research to consider the opinion of retailers about their own management of these brands.

Originality/value

The research uses objective actual financial results before and after adoption of QR and avoids the practice of using subjective management opinions of success. The research design includes before and after analysis with a control group – the strongest design possible given the inability to randomly assign firms to the adopter and non‐adopter categories.

Citation

Brown, T. and Buttross, T.E. (2008), "An empirical analysis of the financial impact of quick response", International Journal of Retail & Distribution Management, Vol. 36 No. 8, pp. 607-626. https://doi.org/10.1108/09590550810883469