Abstract:

In recent years， the rapid development of e-commerce and increasing market competition have prompted online retailers to explore new business modes， among which omni-channel retailing has gained significant attention. Omni-channel retailing enables online retailers to interact with consumers across multiple channels， offering a variety of purchasing options. However， the integration of channels by online retailers influences consumers' channel selection and purchasing behavior， as well as the operational and decision-making processes of the e-commerce supply chain. This integration may result in imbalanced decision-making incentives within the supply chain and lead to performance losses for online retailers.In this study， a system composed of one manufacturer， one online retailer and one traditional retailer is examined， focusing on the effects of channel integration on consumer purchasing behavior and the selection of BOPS （Buy-Online-and-Pickup-in-Store） channel. A consumer utility function is developed to derive product demand and subsequently construct game models for both pre- and post-channel integration， utilizing backward induction to determine the equilibrium of the model. Based on the equilibrium outcomes， the online retailer's channel integration strategy and its effects on product pricing， firm profits， and consumer welfare are analyzed.Several findings are obtained. First， in the competition between online and offline channels， offline channels reduce consumer uncertainty regarding products， leading to higher retail prices for products sold through these channels. This conclusion remains unaffected by channel integration. Second， from the perspectives of market share and profit maximization， the online retailer is incentivized to adopt a channel integration strategy. Furthermore， when the online retailer integrates offline channels， the， manufacturer adjusts the wholesale price of the product based on the proportion of consumers choosing BOPS channels. This adjustment， in turn， impacts the retail prices of products in both online and offline channels， as well as the profits of each firm. However， this effect is not necessarily advantageous for the manufacturer or the overall supply chain system. Third， from the consumer behavior perspective， channel integration may motivate some low-valuation consumers to make purchases， while some consumers who initially prefer offline channels may exhibit channel migration behavior， shifting from online to offline channels for their purchases. Given these changes in consumer purchasing behavior and product retail prices， channel integration may not enhance consumer welfare.It highlights the significance of channel integration strategies for online retailers in this study. It not only enhances the research on channel management and consumer behavior theory within the e-commerce context but also provides a theoretical foundation for online retailers to innovate their business modes and operational practices. Future research could further investigate scenarios involving multiple competing manufacturers collaborating with online retailers to examine their channel integration strategies， which would contribute to addressing various practical issues.

Key words: channel integration, omni-channel retailing, BOPS, online retailer