Staff Report 261

Bar Codes Lead to Frequent Deliveries and Superstores

Thomas J. Holmes | University of Minnesota, Federal Reserve Bank of Minneapolis

Published May 1, 1999

This paper explores the consequences of new information technologies, such as bar codes and computer-tracking of inventories, for the optimal organization of retail. The first result is that there is a complementarity between the new information technology and frequent deliveries. This is consistent with the recent move in the retail sector toward higher-frequency delivery schedules. The second result is that adoption of the new technology tends to increase store size. This is consistent with recent increases in store size and the success of the superstore model of retail organization.

Published In: RAND Journal of Economics (Vol. 32, No. 4, Winter 2001, pp. 708-725)

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