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Chinese Journal of Management Science ›› 2018, Vol. 26 ›› Issue (3): 101-108.doi: 10.16381/j.cnki.issn1003-207x.2018.03.011

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Pricing and Service Cooperation with “Buy-Online, Pick-up-in-Store”: Considering Upselling Effect and Leadership Structures

FAN Chen, LIU Yong-mei, CHEN Xiao-hong   

  1. School of Business, Central South University, Changsha 410083, China
  • Received:2016-07-12 Revised:2017-07-19 Online:2018-03-20 Published:2018-05-24

Abstract: The omni-channel retailing has been a recent trend in retailing industry. Buy-online,pick-up-in-store is one of the most typical patterns and is widely applied in world famous retailers as Uniqlo. This mode brings better service experience to the consumers and more traffic and sales to the brick-and-mortar stores, in the mean time, challenging the extant online and offline operations in pricing and revenue allocation. Thus, how to make the optimal price and service decisions, through what contracts the supply chain is coordinated, and how the leadership structures affect the optimal decisions and profits, are of great significance theoretically and practically.
The price and service decision model is built in centralized, manufacturer-leading and retailer-leading scenarios respectively, using a rebate contract and a wholesale price contract to coordinate the supply chain. Furthermore, illustrated examples are used to analyze the decision and profit comparison in different scenarios, and the supply chain efficiency is examined. It is found that:1) in the retailer-leading structure, the rebate contract can effectively coordinate the supply chain, and the wholesale price decided by the manufacturer does not influence price and service level and the final revenue allocation; 2) in the manufacturer-leading structure, the wholesale price contract is effective, and the exogenous rebate influences the decision making and revenue allocation and the supply chain gains the optimal profit if it reached zero; 3) generally, the manufacturer-leading structure performs more effectively than the retailer-leading structure, and the double-marginalization effect is less significant.
The contribution of the paper lies in two parts. First, it is an attempt in building a new price-service decision model in omni-channel research area. Second, it provides insights to the manufacturers and retailers in BOPS implementation considering different leadership structures.

Key words: buy online, pick up in store, upselling, channel leadership structure, revenue sharing

CLC Number: