Optimal service decisions in an omni-channel with buy-online-and-pick-up-in-store

Xiaojun Fan, Lin Tian, Chengfu Wang and Shanshan Wang

Journal of the Operational Research Society, 2022, vol. 73, issue 4, 794-810

Abstract: Omni-channel retailing has emerged as a major trend in e-commerce. The strategy of buy-online-and-pick-up-in-store (BOPS) has been applied in a variety of contexts. Customers make optimal purchasing decisions depending on the services provided by purchasing channels. Several studies have applied theoretical framework to analyze the effect of BOPS on omni-channel operations; however, they rarely considered the impact of BOPS on channel services. To fill the gap, in this study, we propose an analytical model consisting of a manufacturer with an online channel and an independent retailer. We examine the optimal service decisions in an omni-channel with BOPS and analyze the interaction between the service decisions and the BOPS strategy. Our analysis shows that BOPS attracts both existing and potential customers, whereas all channels will reduce their service levels after introducing BOPS when the cost of increasing online service levels is high. Further, we find that BOPS should be introduced when the service levels of all channels are low, and it may not be suitable for the case in which all channels’ service levels are high. While the adoption of BOPS is beneficial to the retailer, it will be disadvantageous for the manufacturer. Given that the total profit of members will increase after BOPS is introduced in some cases, we design a two-part traffic contract to ensure a win-win situation for all participants.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1080/01605682.2020.1863753 (text/html)
Access to full text is restricted to subscribers.

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:taf:tjorxx:v:73:y:2022:i:4:p:794-810

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tjor20

DOI: 10.1080/01605682.2020.1863753

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald

More articles in Journal of the Operational Research Society from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().