E-commerce retail of extra virgin olive oil: an hedonic analysis of Italian SMEs supply

Purpose - The purpose of this paper is to analyse the relationship between the price of extra virgin olive (EVO) oil and its main quality attributes, in the specific case of business-to-consumers electronic commerce (B2C EC) channel. The final objective is to provide useful insights for small and medium-sized enterprises (SMEs) interested in online selling of EVO. Design/methodology/approach - A hedonic price model was estimated considering the following attributes: packaging, cultivar composition, organic certification, oil extraction method, origin certification and localization of selling firms. A survey was performed in 2012 considering 169 virtual stores of SMEs (farms, mills and bottlers) located in all the main Italian olive-growing areas. A data set of 667 references was used to estimate the implicit prices of considered attributes. Findings - The EVOs sold through virtual stores are highly differentiated on the basis of several quality attributes among which the most important is the certification of origin (protected denominations of origin/protected geographical indication). Therefore the firm location could generate considerable advantages or disadvantages in adopting a B2C EC strategy. Research limitations/implications - Future researches should develop a comparison between the premium prices and costs associated to each attribute in order to find the best product differentiation strategy. An accurate analysis about the implementation and management costs of EC systems as well as an examination of interactions between online and offline sale channels is needed. It would be useful to compare the manufacturer direct sell business model with other business model. Originality/value - Few studies applied the hedonic price model to analyse the retail olive oil market. Nevertheless, no studies have analysed the market of EVO sold in virtual shops.