主管:中国科学院
主办:中国优选法统筹法与经济数学研究会
   中国科学院科技战略咨询研究院

Retailer Product Differentiation Strategy Analysis Based on Consumer Learning Behavior under the Showrooming Phenomenon

  • Xiao Zhang ,
  • Xiang Xu ,
  • Yan Zhang ,
  • Fang Fang
Expand
  • School of Economics and Management,Xi Dian University,Xi’an 710126,China

Received date: 2021-02-02

  Revised date: 2021-07-12

  Online published: 2024-04-25

Abstract

With the rapid development of e-commerce and the rise of multi-channel retail models, more and more online retailers are adding offline brick-and-mortar showrooms to meet consumers' individual needs with the help of product features and uniqueness displays. Likewise, more and more offline retailers are opening up online channels to increase product sales. When online and offline channels coexist, product purchase channels are gradually diversified, and the "showrooming style" of "offline experience + online purchase" is popular among consumers, but it has also intensified the competition between online and offline retailers. In this paper, the product differentiation strategy of retailer competition under the showrooming phenomenon are studied and the impact of the showrooming and product differentiation strategy on offline and online retailers is explored. The consumer decision process is divided into two stages: the information search stage and the purchase decision stage, each of which has both online and offline channels. First, the learning behavior of consumers in the information search stage are considered, and the self-learning model for offline experience and social learning model for online information search are established. Then, the consumer utility models for different information search-purchase channels are built on this basis, i.e., the S-S channel, O-O channel and S-O channel, respectively. Based on the Hotelling model and the consumer utility model, the competitive game of offline and online retailers is analyzed. Furthermore, a competitive model of product differentiation of retailers are constructed and the impact of showrooming and product differentiation strategy on offline and online retailers is studied by comparing the base competition model and the product differentiation competition model. The result shows that under certain conditions, the showrooming intensifies the competition between offline and online retailers, while product differentiation strategy alleviates the competition between offline and online retailers to a certain extent and increases the profits of offline retailers. In addition, consumer learning behavior has an impact on retailers, where good Internet Word of Mouth (IWOM) has a positive impact on the profits of online retailers, while the number of online reviews has a positive impact on consumer learning. Some guidances are provided to alleviate the channel conflict between offline and online retailers and promote retail development.

Cite this article

Xiao Zhang , Xiang Xu , Yan Zhang , Fang Fang . Retailer Product Differentiation Strategy Analysis Based on Consumer Learning Behavior under the Showrooming Phenomenon[J]. Chinese Journal of Management Science, 2024 , 32(4) : 198 -207 . DOI: 10.16381/j.cnki.issn1003-207x.2021.0372

References

1 Telser L G. Why should manufacturers want fair trade?[J]. The Journal of Law and Economics, 1960, 3: 86-105.
2 Accenture. 2019 Digital Consumer Survey Report [EB/OL]. (2019-04-12) [2021-01-01]. .
3 Rejón-Guardia F, Luna-Nevarez C. Showrooming in consumer electronics retailing: an empirical study[J]. Journal of Internet Commerce, 2017, 16(2): 174-201.
4 Shin J. How does free riding on customer service affect competition?[J]. Marketing Science, 2007, 26(4): 488-503.
5 Li G, Zhang T, Tayi G K. Inroad into omni-channel retailing: physical showroom deployment of an online retailer[J]. European Journal of Operational Research, 2020, 283(2): 676-691.
6 Arora S, Singha K, Sahney S. Understanding consumer’s showrooming behaviour: extending the theory of planned behavior[J]. Asia Pacific Journal of Marketing and Logistics, 2017, 29(2): 409-431.
7 Kang J. Showrooming, webrooming, and user-generated content creation in the omnichannel era[J]. Journal of Internet Commerce, 2018, 17(2): 145-169.
8 曹磊, 张子刚. 供应链双源渠道中基于信息的搭便车行为[J]. 情报杂志, 2009, 28(7): 180-184.
8 Cao L, Zhang Z G. Information-based free-riding behavior in a dual-channel supply chain[J]. Journal of Intelligence, 2009,28(7):180-184.
9 Dahana W, Shin H, Katsumata S. Influence of individual characteristics on whether and how much consumers engage in showrooming behavior[J]. Electronic Commerce Research, 2017, 18(4): 665-692.
10 Gensler S, Neslin S A, Verhoef P C. The showrooming phenomenon: it’s more than just about price[J]. Journal of Interactive Marketing, 2017, 38: 29-43.
11 Basu P, Basak S, Avittathur B, et al. A game theoretic analysis of multichannel retail in the context of “showrooming”[J]. Decision Support Systems, 2017, 103, 34-45.
12 刘晓峰, 顾领. 基于消费者转换行为的线上线下产品定价策略研究[J].管理科学,2016, 164(2): 97-107.
12 Liu X F, Gu L. The study of pricing strategy in online-offline channel based on the consumer's switching behavior[J]. Journal of Management Science, 2016, 164(2): 97-107.
13 Jing B. Showrooming and webrooming: information externalities between online and offline sellers[J]. Marketing Science, 2018, 37(3): 469-483.
14 Mehra A, Kumar S, Raju J S. Competitive strategies for Brick-and-Mortar stores to counter “Showrooming”[J]. Management Science, 2018, 64(7): 3076-3090.
15 Bell D R, Gallino S, Moreno A. Offline showrooms in omni-channel retail: demand and operational benefits[J]. Management Science, 2018, 64(4): 1629-1651.
16 Liu Z X, Lu L, Qi X T. The showrooming effect on integrated dual channels[J]. Journal of the Operational Research Society, 2020, 71(9): 1347-1356.
17 Bergen M, Dutta S, Shugan S M. Branded variants: a retail perspective[J]. Journal of Marketing Research, 1996, 33(2): 9-19.
18 Jeuland A P, Shugan S M. Managing channel pro?ts[J]. Marketing Science, 1983, 2(3): 239-272.
19 Desai P S. Advertising fee in business-format franchising[J]. Management Science, 1997, 43(10): 1401-1419.
20 Kuksov D, Liao C. When showrooming increases retailer profit[J]. Social Science Electronic Publishing, 2017, 55(4): 459-473.
21 Fassnacht M, Beatty S E, Szajna M. Combating the negative effects of showrooming: successful salesperson tactics for converting showroomers into buyers[J]. Journal of Business Research, 2019, 102(SEP):131-139.
22 Zhang T, Ge L, Gou Q L, et al. Consumer showrooming, the sunk cost effect and online-offline competition[J]. Journal of Electronic, 2018, 19(1): 55-74.
23 冯娇, 姚忠. 基于社会学习理论的在线评论信息对购买决策的影响研究[J]. 中国管理科学, 2016, 24(9): 106-114.
23 Feng J, Yao Z. Consumer-generated reviews based on social learning theory: implications for purchase decision[J]. Chinese Journal of Management Science,2016, 24(9): 106-114.
24 Chen A, Lu Y, Wang B. Customers’ purchase decision-making process in social commerce: a social learning perspective[J]. International Journal of Information Management, 2017, 37(6): 627-638.
25 Zhang Y, Godes D. Learning from online social ties[J]. Marketing Science, 2018, 37(3): 425-444.
26 Papanastasiou Y, Savva N. Dynamic pricing in the presence of social learning and strategic consumers[J]. Management Science, 2017, 63(4): 919-939.
27 Qiu L, Whinston A B. Pricing strategies under behavioral observational learning in social networks[J]. Production and Operations Management, 2017, 26(7): 1249-1267.
28 Chamley C P. Rational herds: economic models of social learning[M]. Cambridge: Cambridge University Press, 2004.
29 Forman C, Ghose A, Goldfarb A. Competition between local and electronic markets: how the benefit of buying online depends on where you live[J]. Management Science, 2009, 55(1): 47-57.
30 Gao F, Su X. Omnichannel retail operations with Buy-Online-and-Pick-Up-In-Store[J]. Management Science, 2017, 63 (8): 2478–2492.
31 Lin X G, Zhou Y W, Hou R. Impact of a “Buy-online-and-pickup-in-store” channel on price and quality decision in a supply chain[J]. European Journal of Operational Research, 2021, 294(3): 922-935.
32 DeGroot M H. Optimal statistical decisions[M]. New York: John Wiley & Sons, 2005.
Outlines

/