Abstract: With the rapid development of the Internet, more and more consumers enjoy the convenience of online shopping. But the high return rate is becoming a big problem for the online sales of brand suppliers. One of the biggest advantages of O2O channel is to provide easy offline experience, return and other services, which, to a certain extent, avoid blind and impulse buying behavior of customers and reduce the possibility of online shopping returns. Based on this background, two types of typical brand suppliers are considered:a single network channel brand supplier and a "network + entity" dual-channel brand supplier, who respectively opens O2O channels, thus corresponding to four channel modes, i.e., a single network channel, a "network + O2O" channel, a "network + entity" dual-channel and a "network + O2O + entity" three channels. The optimal pricing strategies of the brand supplier are studied in these four modes, respectively. The impact of the return rate of the network channel on the optimal pricing and profit of the brand supplier is discussed. Further, by respectively comparing the optimal profits between a single network channel and a "network + O2O" channel, and between a "network + entity" dual-channel and a "network + O2O + entity" three channels, the conditions for the above two types of brand suppliers are analyzed to open an O2O channel. Results show that a higher return rate of the network channel will result in higher network channel pricing and lower profit of the brand supplier. Regardless of whether or not the O2O channel can reduce the return rate, the brand supplier can introduce O2O channels under different conditions.

Key words: return rate, O2O channel selection, decision pricing, utility function