Physical or virtual showroom? The decision for omni-channel retailers in the context of cross-channel free-riding

Zhe Zhang () and Xiaoni Wen ()
Additional contact information
Zhe Zhang: Xidian University
Xiaoni Wen: Xidian University

Electronic Commerce Research, 2024, vol. 24, issue 4, No 16, 2609-2635

Abstract: Abstract This paper studies the impacts of showrooms, both virtual and physical, on omni-channel retailers in the face of consumers’ cross-channel free-riding behaviors. A theoretical model was developed, in which an omni-channel retailer sells substitute products in offline and online channels, and consumers’ showrooming and webrooming behaviors are considered. The high travel cost case was identified, in which some consumers directly buy a product online without visiting the offline store, as well as the low travel cost case, in which all consumers buy a product after visiting the offline store. The results show that, in the high (low) travel cost case, a virtual showroom increases the omni-channel retailer’s profit when the travel cost is low (high). However, if the omni-channel retailer builds a physical showroom, in the high travel cost case, the retailer’s profit increases when the travel cost is low; in the low travel cost case, the retailer’s profit increases when the hassle cost is high. Furthermore, these two types of showrooms are compared when either type increases the retailer’s profit and the optimal showroom strategy for the omni-channel retailer is identified. The results show that if the travel cost is high (low), building a physical showroom is more profitable than building a virtual showroom when the travel cost is sufficiently high (low).

Keywords: Showrooms; Showrooming; Webrooming; Omni-channel retailing (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10660-022-09616-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:elcore:v:24:y:2024:i:4:d:10.1007_s10660-022-09616-x

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10660

DOI: 10.1007/s10660-022-09616-x

Access Statistics for this article

Electronic Commerce Research is currently edited by James Westland

More articles in Electronic Commerce Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().