The strategic value of buy online and pick up from store service to the dual channel coordination

Zhi Pei, Sanjoy Ghose, Ruiliang Yan, Steve B. Zhou and Angela Yan

Journal of Retailing and Consumer Services, 2024, vol. 77, issue C

Abstract: Buy online and pick up from store (BOPS) has been widely practiced in the business market. However, prior studies in literature have not addressed what is the strategic value of BOPS to supply chain performance, who should pay the cost of BOPS, and what is the optimal strategy to implement the BOPS to maximize channel coordination. To fill this gap, we first examine the effect of this newer type of service on supply chain performance. Further, we compare various scenarios to examine which channel member should pay the cost of the BOPS, and how BOPS impacts supply chain performance. Finally, we initiate a new coordination mechanism to solve the dilemma where the manufacturer likes to share the BOPS cost, but the physical reseller prefers to pay fully for it. Our paper provides novel findings: (1) using only the cost-sharing strategy of the BOPS or the reseller's full payment for the BOPS is not an optimal way to improve supply chain performance; (2) quantity discount cannot behave effectively to motivate the reseller to implement the cost sharing strategy of the BOPS; however, (3) profit sharing can perform as an valuable contract to stimulate the reseller to implement the cost-sharing strategy of the BOPS and create higher supply chain performance. Moreover, our research shows a counter-intuitive result: if profit sharing contract is not offered, the reseller's full payment for the BOPS is a better choice to achieve higher supply chain performance than the cost sharing strategy of the BOPS; however, if profit sharing contract is offered to complement the cost sharing strategy of the BOPS and the physical reseller's full payment for the BOPS cost respectively, the result is reversed.

Keywords: Retailing; BOPS service; Channel competition; Coordination; Game theoretical models (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969698923003995
Full text for ScienceDirect subscribers only

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:eee:joreco:v:77:y:2024:i:c:s0969698923003995

DOI: 10.1016/j.jretconser.2023.103648

Access Statistics for this article

Journal of Retailing and Consumer Services is currently edited by Harry Timmermans

More articles in Journal of Retailing and Consumer Services from Elsevier
Bibliographic data for series maintained by Catherine Liu ().