The case company is a mail order/Internet apparel retailer operating only in the Netherlands. It divides each year into two selling seasons, spring-summer (December-June) and autumn-winter (June-December). One main catalogue is issued per season, and several smaller catalogs appear throughout the year, containing special collections or special offers aimed at speci?c groups of customers. A total of around 80,000 SKUs are offered, distributed over three collections: apparel, furniture and consumer electronics. We focus on the apparel collection in themain catalog, which generally contains around 25,000 SKUs.

Per sales season, the company distributes over 70,000 preview catalogs and 1.5 million main catalogs, generating roughly 6 million order lines. The company's yearly turnover is around 350 million Euro. Apart from being the largest home shopping retailer in the Dutch market with 1.5 million returning customers, the company has also become a major and successful Internet retailer over the past few years. It uses four sales channels: website, call center, voice response system, and regular mail. Over the three years covered by our data set, the company's turnover has decreased from 357 million euros, to 339 million, and 326 million due to consumers becoming more price-sensitive.

In the same period, orders via the website have increased from 20% of the total volume, to 30%, and over 40%.