Omnichannel Retail Strategy Considering Cost-Sharing and Consumer Heterogeneity under Different Power Structures
Abstract
:1. Introduction
- (1)
- How does the cost sharing ratio impact the optimal pricing and service decisions of the supply chain members?
- (2)
- How do the consumer heterogeneity and consumer composition affect retailers’ pricing and service decisions?
- (3)
- Which model yields the best decisions of the omnichannel retail system?
- (4)
- How should the brand retailers adjust operating decisions to maximize profits under different power structures considering consumer heterogeneity?
2. Literature Review
2.1. BOPS Omnichannel Retail
2.2. Cost-Sharing Mechanism
2.3. Power Structure
3. Problem Definitions
4. Model Formulation and Solution
5. BOPS Supply Chain Dominated by the Online Platform (Scenario U)
5.1. Insights on Impacts of Cost-Sharing Ratio
- (i)
- Priceincreases with the cost-sharing ratiowhenand then decreases when;
- (ii)
- Service levelincreases with the cost-sharing ratiowhenand then decreases when.
- (i)
- The demand of traditional consumersand the demand of the BOPS consumersincrease with the cost-sharing ratiowhenand decrease when.
- (ii)
- The demand of online shopping consumersdecreases with the cost-sharing ratio when, and increases when.
- (iii)
- The total demand of the retail systemincreases with the ratiowhen, and decreases when.
- (i)
- The profit of the online platformincreases with the cost-sharing ratiowhen, and decreases when.
- (ii)
- The profit of the brick-and-mortar storeincreases at the threshold, and decreases at the threshold.
- (iii)
- The profit of the retail systemdecreases in the threshold, and increases in the threshold.
5.2. Insights on the Proportion of Traditional Consumers
- (i)
- Priceand service leveldecrease with the proportion of traditional consumers.
- (ii)
- The demand of traditional consumersincreases with the proportion of traditional consumers; the demand of BOPS consumersand the demand of online shopping consumersdecrease with.
- (iii)
- The symmetry demand of the retail systemincreases with the proportion of traditional consumersunder the threshold, and decreases in the threshold.
- (i)
- The profit of the online platformdecreases with the proportion of traditional consumers.
- (ii)
- The profit of the brick-and-mortar storeincreases with the proportion of traditional consumerswhen, and decreasesotherwise.
- (iii)
- The profit of the retail systemincreases with the proportion of traditional consumerswhen, and decreases withotherwise.
6. BOPS Supply Chain Dominated by the Brick-and-Mortar Store (Scenario D)
6.1. Insights on Impacts of the Cost Sharing Ratio
- (i)
- Priceand service leveldecrease with the cost-sharing ratio whenand increase withotherwise.
- (ii)
- The demand of traditional consumers, the demand of BOPS consumers, and the demand of the retail systemdecrease with the cost-sharing ratiowhen, and increase with otherwise. The demand of online shopping consumers increases with when , and decreases with otherwise.
- (i)
- The profit of the online platformincreases with the cost-sharing ratiowhenor, and decreases within other cases.
- (ii)
- The profit of the brick-and-mortar storeincreases with the cost-sharing ratio.
- (iii)
- The profit of the retail systemincreases with the cost-sharing ratiowhen, and decreases withotherwise.
6.2. Insights on the Proportion of Traditional Consumers
- (i)
- Pricedecreases with the proportion of traditional consumersin the threshold, and increases within the threshold.
- (ii)
- Service levelincreases with the proportion of traditional consumerswhen, and decreases withotherwise.
- (i)
- Traditional consumers’ demandincreases with the proportion of traditional consumersin the threshold, and decreases within the threshold.
- (ii)
- BOPS consumers’ demandincreases with the proportion of traditional consumersin the threshold, and decreases in the threshold.
- (iii)
- Online shopping consumers’ demanddecreases with the proportion of traditional consumersin the threshold, and increases within the threshold.
- (iv)
- The retail system’s demandincreases with the proportion of traditional consumersin the threshold, and decreases in the threshold.
- (i)
- The profit of the online platformdecreases with the proportion of traditional consumerswhenoror, and increases within other cases.
- (ii)
- The profit of the brick-and-mortar storeincreases with the proportion of traditional consumerswhenoror, and decreases within other cases.
- (iii)
- The profit of the retail systemincreases with the proportion of traditional consumerswhen, and decreases withotherwise.
7. Comparative Analysis
- (i)
- Service levelin Scenario U is higher thanin Scenario D whenor, and lower thanin other cases.
- (ii)
- Pricein Scenario U is higher thanin Scenario D whenor, and lower thanin other cases.
- (i)
- The demand of online shopping consumersin Scenario U is lower thanin Scenario D whenor, and higher thanin other cases.
- (ii)
- The demand of traditional consumersand the demand of BOPS consumersin Scenario U are respectively higher thanandin Scenario D whenoror, and the contrast is reversed in other cases.
- (iii)
- The demand for the retail systemin Scenario U is higher thanin Scenario D whenoror.
- (i)
- Supposing the two solutions ofareandrespectively, then, and the solution of is, which can be calculated as 0.728177. The profit of the online platformin Scenario U is higher thanin Scenario D whenoror, and lower thanin other cases.
- (ii)
- Supposing the two solutions ofareandrespectively, then. The profit of the brick-and-mortar storein Scenario U is higher thanin Scenario D whenor, and lower thanin other cases.
- (iii)
- Supposing the two solutions of are and respectively, then and the solution of is , which can be calculated as 0.412334. The profit of the retail system in Scenario U is higher than in Scenario D when or or or , and lower than in other cases.
8. Managerial Implications and Conclusions
Author Contributions
Funding
Data Availability Statement
Acknowledgments
Conflicts of Interest
Appendix A
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Symbol | Description |
---|---|
The unit cost of the product | |
Potential market demand | |
The service level of the brick-and-mortar store, | |
The uniform sales price of products through channels | |
The cost allocation proportion of the online platform, | |
Percentage of various segments of consumers, , | |
The demand of traditional consumers | |
The demand of BOPS consumers | |
The demand of online shopping consumers | |
The total demand of the retail system | |
Profit of the online platform | |
Profit of the brick-and-mortar store | |
The total profit of the retail system, |
Variables | Scenario U | Scenario D |
---|---|---|
Cost Allocation Proportion | Online Platform | Brick–and-Mortar Store | Retail System | |
---|---|---|---|---|
The Demand of Online Shopping Consumers | The Demand of BOPS Consumers | The Demand of Traditional Consumers | The Demand for All Channels | |
↓ | ↑ | ↑ | ↑ | |
↑ | ↑ | ↑ | ↑ | |
↑ | ↓ | ↓ | ↑ | |
↑ | ↓ | ↓ | ↓ |
Cost Allocation Proportion | Online Platform | Brick–and-Mortar Store | Retail System | |
---|---|---|---|---|
The Demand of Online Shopping Consumers | The Demand of BOPS Consumers | The Demand of Traditional Consumers | The Demand for All Channels | |
− | + | + | + | |
+ | − | − | − | |
− | − | − | − | |
− | − | + | − | |
− | − | + | + |
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Gong, Y.; Ma, Y.; Wang, Z. Omnichannel Retail Strategy Considering Cost-Sharing and Consumer Heterogeneity under Different Power Structures. Mathematics 2022, 10, 4004. https://doi.org/10.3390/math10214004
Gong Y, Ma Y, Wang Z. Omnichannel Retail Strategy Considering Cost-Sharing and Consumer Heterogeneity under Different Power Structures. Mathematics. 2022; 10(21):4004. https://doi.org/10.3390/math10214004
Chicago/Turabian StyleGong, Yande, Yidan Ma, and Zhe Wang. 2022. "Omnichannel Retail Strategy Considering Cost-Sharing and Consumer Heterogeneity under Different Power Structures" Mathematics 10, no. 21: 4004. https://doi.org/10.3390/math10214004
APA StyleGong, Y., Ma, Y., & Wang, Z. (2022). Omnichannel Retail Strategy Considering Cost-Sharing and Consumer Heterogeneity under Different Power Structures. Mathematics, 10(21), 4004. https://doi.org/10.3390/math10214004