Buy-online-pickup-in-store service: A precarious competing strategy

Lina Zhang and Yumeng Zhang

Transportation Research Part E: Logistics and Transportation Review, 2025, vol. 197, issue C

Abstract: The widespread adoption of buy-online-pickup-in-store (BOPS) services has attracted significant research attention, particularly regarding when an online retailer should deploy BOPS service for last-mile delivery (LMD). This study examines the efficiency of BOPS adoption in a competing environment. Using a game-theoretical model within a duopoly framework, we investigate the pricing and BOPS service design decisions between competing retailers with varying home delivery (HD) service qualities. The results reveal how a retailer responds to its competitor’s different BOPS adoption strategies. When it is not yet available in the market, BOPS service provides a competitive advantage as the only BOPS-offering retailer enjoys increased profits. We identify distinctive profit mechanisms for retailers with a higher or lower level of HD service quality: enhanced competitive differentiation effect for the former and quality perception improvement effect for the latter. Nevertheless, our analysis shows that when both retailers adopt BOPS service, they reach an equilibrium where at least one retailer is worse off. The prisoner’s dilemma may occur where both retailers end up in a suboptimal position, and the likelihood of this dilemma is influenced by their HD service quality differentiation. Ultimately, while seemingly beneficial, BOPS service is a precarious competitive strategy that may trap retailers. Our findings contribute to the expanding BOPS literature and offer valuable practical implications for online retailing.

Keywords: BOPS; LMD; Online retailing; Game theory (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1366554525000912
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:transe:v:197:y:2025:i:c:s1366554525000912

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic
http://www.elsevier. ... 600244/bibliographic

DOI: 10.1016/j.tre.2025.104050

Access Statistics for this article

Transportation Research Part E: Logistics and Transportation Review is currently edited by W. Talley

More articles in Transportation Research Part E: Logistics and Transportation Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().