Simulating continuance and resilience: an agent-based model for nanostores operations

Abstract

Paper aims This study investigates the nanostores' endurance in serving underserved regions in developing countries. The research explores how various competing retail formats influence market choice and demand. We used data from a survey conducted in Sabana Centro, Colombia, in this study. Originality We believe this is the first study examining the nanostores' resilience in serving emerging markets under this novel hybrid technique. Research method We propose a multi-agent-based model mimicking nanostore survival and resilience in a competitive market. Household agents use a discrete choice model to select their preferred retail format for household purchases based on location, price, and service levels. Considering supply breakdowns, we tested the outcoming model under different disruption scenarios. Main findings Results indicated nanostores' great resiliency in competitive markets, specifically in peripheral areas, which are usually neglected by other retail formats. This suggests that this retail format can strategically complement household supply in underserved areas, displaying the importance of supporting these channels and generating tools that improve their performance in the market. Implications for theory and practice Theoretically, we aim to improve the understanding of households' decision-making process when buying food. Practically, a multi-agent-based model simulating end customers and sellers offers insights into future interventions and their impacts on the retail landscape and various supply chain stakeholders.