Paid retail memberships have become a fixture of the US retail landscape, and retailers and other service providers are increasingly attempting to attract and retain members by incorporating additional features and benefits into memberships. However, several major brands are coming under antitrust scrutiny for their bundling practices.
In a recent Law360 article, Principal Mame Maloney and her coauthors summarize their research exploring the welfare implications of bundling strategies in the retail sector. While bundled goods and services have the potential to benefit both consumers and sellers, bundles can also reduce customer flexibility, and customers may feel they have to compromise on their specific needs and be constrained by provider choice limitations. However, the authors – providing survey evidence regarding how customers view the attributes and features of the paid retail memberships they own – find that consumers enjoy the inclusion of additional features in such memberships and estimate a consumer surplus of approximately $1.6 billion from four big-box retail memberships that include bundled benefits.
The Law360 article provides a summary of the authors’ findings, and the full results and additional discussion is available on the Computer & Communications Industry Association (CCIA) Research Center website.
The full article, “Unraveling The Bundled Benefits of Retail Memberships,” is available below.