Abstract:

To enhance consumers’ shopping experience， a growing number of retailers who own both offline and online channels are introducing buy-online-and-pickup-in-store （BOPS） channels. Meanwhile， the platform will deliver coupons for retailers' BOPS and online channels to promote consumption. Based on the practice， this raises the following two interesting questions： What is the platform’s coupon delivery strategy when the retailer builds BOPS and online channels？ What is the impact of the platform’s coupon delivery strategy on retailers and consumers？ To answer these questions， considering a supply chain with an e-commerce platform， and a retailer who can implement omni-channel strategy by entering the platform， two models are built to study whether the platform should deliver coupons to both the BOPS and online channels.Our main results suggest that　（i） The platform chooses to deliver small denomination coupons when search cost is small.（ii） The platform’s couponing strategy is not always beneficial to the retailer and consumers. Specifically， only when both the channel preference and the search cost are not moderately large， delivering coupons can increase the retailer’s profit. Furthermore， only when the search cost is moderate or large， the platform can increase consumer surplus by delivering coupons. （iii） If the channel preference is small and the search cost is moderate， the platform will deliver coupons to achieve a “win-win-win” situation in which the platform， retailer， and consumers become better-off. Finally， a numerical example is used to analyze the situation where the cost of sales in physical stores is large. It is observed that consumers’ preference for the BOPS and online channels plays a key role in determining the coupon strategy for the platform. In fact， when the channel preference is high， the platform is likely to deliver coupons.

Key words: e-commerce platform, omni-channel, BOPS, coupon delivery strategy